Instructor’s Manual For Administrative Law Bureaucracy in a Democracy 7th Edition

Contents To the Instructor

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Syllabi

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Chapter 1: Introduction

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Chapter 2: Bureaucracy and Democracy

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Chapter 3: Agency Discretion

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Chapter 4: The Requirements of Fairness

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Chapter 5: Delegation

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Chapter 6: Agency Rulemaking

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Chapter 7: Agency Information Collections and Investigations

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Chapter 8: Formal Adjudications

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Chapter 9: Accountability Through Reviewability

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Chapter 10: Accountability Through Accessibility

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Chapter 11: Accountability Through Liability

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Chapter 1 Introduction CHAPTER OVERVIEW Chapter 1 provides an introduction to administrative law. Administrative regulation is omnipresent in American life. The high level of regulation is likely the result of many factors, such as technological complexity, increases in population, and an increased interdependence of the members of the American family. As a field of law, administrative law is concerned with defining the duties and powers of administrative agencies. More important, administrative law also defines the limits of agency powers. Most agency structure and authority are defined by statute or executive order. Limitations on agency authority can be found in statutes, executive orders, and, most prominently, the Constitution.

CHAPTER OBJECTIVES After completing this chapter, the student should be able to • Define what administrative law is and isn’t.

• Identify and distinguish the sources of administrative law in the United States.

• Describe the nature and complexity of the administrative state at the federal, state, and local levels.

• Describe the various forms of agencies.

• Explain why the administrative state is larger today than at the time of the adoption of the U.S. Constitution, and identify at least two ways administrative law impacts your life.

LECTURE OUTLINE 1.1

ADMINISTRATIVE LAW DEFINED • Body of law developed to control and administer agency’s behavior and function • Administrative law defines agency’s o Powers o Limitations o Procedures

1.2

SOURCES OF ADMINISTRATIVE LAW 1.2(a) Constitution • Significant source of law in the administrative context, including; o Separation of powers o Federalism o Article I (powers of the National government o Article I (interstate commerce) o Fifth Amendment due process o Fourteenth Amendment equal protection 1.2(b) Enabling Laws • Statute that establishes an agency o Sets forth responsibilities o Sets forth authority 1.2(c) Administrative Procedures Act • Federal 12

o Passed in 1946 o Comprehensive but preempted by enabling statute • State (uniform state APA) o Approved in 1946 by; • National Conference on Uniform State Laws • American Bar Association o Amended twice (1961 and 1981) o Adopted by 30 states and the District of Columbia (as of 2/2005) o 20 states have adopted another form of administrative procedures law 1.2(d) Executive Orders • An executive order has the effect of a statute • Sources of authority for president to issue an executive order; o Article II (inherent authority to regulate as chief executive) o Authorization of Congress • Executive orders are generally preempted by statutes o Exception – if Congress has specifically delegated authority to act to the president • Executive orders are published in the Federal Register 1.3

ADMINISTRATIVE AGENCIES • May be called: o Departments o Commissions o Bureaus o Councils o Groups o Services o Divisions o Agencies o Administrations o Boards See Government of the United States chart; Figure 1-1 1.3(a) The Need for Agencies • Job of government has become too large for Congress, the courts and the executive branch to handle • Agency expertise is necessary 1.3(b) Types of Agencies • Three major types • Social welfare o Promoting the general welfare of the people o Redistributes funds • Regulatory o Proscribes behavior o Determines legal compliance o Licensing 13

o Ratemaking o Prosecuting violators • Public service o Provides services to the public • Other characterizations • Executive o Organ of the executive branch • Independent o Not controlled by the president 1.3(c) The History and Size of the Bureaucracy • Administrative agencies have existed since our nation began o Certain agencies were established by the first Congress ▪ Treasury ▪ Department of War ▪ Foreign Affairs ▪ Patients ▪ Post Office o Era between the great Depression and World War II was a boom period for administrative agencies • In 1800 o There were 3,000 federal government employees o This represented approximately .0005% of total population • In 1995 o Nearly 3,000,000 federal government employees o This represented approximately 1% of total population • Mid-1990s, number of employees swelled to 17 million 1.3(d) The Impact of Agencies on Daily Life • Large number of agencies results in large number of service and regulations 1.4

CONCLUSION

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LIST OF CHANGES/TRANSITION GUIDE The text and image on page 4 to President Trump’s proclamation of January 16, 2018, as “Religious Freedom Day” are new to this edition. The reference on page 8 to the National Defense Authorization Act of 2018 is also new for this edition. The following learning objectives are new to this edition and revised from the previous edition: • Describe the various forms of agencies.

• Explain why the administrative state is larger today than at the time of the adoption of the U.S. Constitution, and identify at least two ways administrative law impacts your life.

ADDITIONAL ASSIGNMENTS AND CLASS ACTIVITIES For a possible in-class class activity, consider holding a mock congressional debate on the creation of a new federal agency. A mock congressional committee hearing could be held with students acting as members of the congressional committee and individuals who testify before the committee. For example, students could debate the creation of the Transportation Security Agency which was created to strengthen the security of the nation’s transportation systems and ensure the freedom of movement for people and commerce. Students could also have a mock congressional debate on a proposal for the creation of a new federal agency to respond to a public policy issue.

SUGGESTED ANSWERS TO END-OF-CHAPTER ASSIGNMENTS Review Questions 1. Administrative Procedure Act 2. The APA defines the procedures that agencies must use in the performance of their functions.

3. The federal APA only applies to federal agencies.

4. A social welfare agency is responsible for promoting the general welfare of the people. They often provide services or monetary distributions to those who qualify for assistance.

A regulatory agency is responsible for establishing rules and regulations thereby proscribing and requiring particular behavior, determining compliance with the law and prosecuting and sometimes punishing violators regarding people and businesses under their proscribed authority.

A public service agency provides services to the public without regulation or redistribution of money.

5. Three sources of administrative law include: U.S. and state constitutions, federal and state enabling legislation and presidential executive orders.

6. Student answers will vary.

Critical Thinking and Applications Problems 15

1. Although the public should certainly benefit from the work of this agency, the BDP would be considered a regulatory agency. It is clearly within the purview of a regulatory agency to oversee the enforcement of deer hunting laws and to prosecute and punish those who violate the laws.

2. Following the stated amendment, the BDP would serve a dual function as both a regulatory and social welfare agency. The BDP’s regulatory powers have been expanded to include the establishment of regulations regarding the setting of hunting seasons, licensing application windows and the establishment of kill limits. By adding the responsibility to redistribute revenues to qualified indigent persons, and the authority to waive fees for those who cannot pay the licensing fee and the authority to waive kill limits for those hunting for food, the BDP has taken on the additional responsibility of a social welfare agency.

3. Discussion problem. Students should elaborate and opine about two of the following factors mentioned in the text: increasing interdependence for goods and services, increasing population, decreasing personal relationships with those with whom we are dependent, technological developments, complexity of life, and changing expectations concerning the provision of services by government. Student answers will vary.

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Chapter 2 Bureaucracy and Democracy CHAPTER OVERVIEW Chapter 2 discusses democracy. The key concepts of democracy, federalism, separation of powers, and bureaucracy are defined and analyzed. Federalism is defined as the division of governmental power between the federal government and state governments. The President, Congress, and courts exercise control of agencies. Some of the key powers of the President to control agencies include being the head of agencies, recommending to Congress agency reorganization, establishing policy, and appointing agency heads. The powers of Congress to control agencies include create and reverse agency-created rules, create and abolish agencies, establishing the budget, and calling agency heads to testify before Congressional committees.

CHAPTER OBJECTIVES After completing this chapter, the student should be able to • Define and distinguish a democracy from a constitutional republic.

• Identify and describe the major structural characteristics of the U.S. government and provisions of the Constitution of the United States that are intended to divide governmental authority and, hence, reduce abuses of authority and explain how administrative agencies pose a challenge to this model.

• List and describe the various ways that the president, Congress, and the courts control bureaucracy.

• Brief a case using the format suggested in the chapter.

• Become familiar with the basic architecture and style of judicial opinions.

LECTURE OUTLINE 2.1

DEMOCRACY AND CONSTITUTIONAL REPUBLICANISM DEFINED 2.1(a) Democracy Defined • Democracy is a form of direct popular government o Roman origin • In a republic, people elect representatives that make the law • U.S. is a constitutional republic o Most laws are made by elected representatives o Popular direct referenda are utilized for law and policy in certain jurisdictions and under certain circumstances • First written U.S. Constitution was the “Articles of Confederation and Perpetual Union” o Adopted in 1781 o Formed a “firm league of friendship” • Current Constitution o Drafted in 1787 o Ratified in 1789 17

o Balanced government and individual powers 2.2

CONSTITUTIONAL STRUCTURES THAT CONTROL AUTHORITY 2.2(a) Federalism • Federalism is the division of governmental power between the federal government and state governments.

• Dual federalism: A federal system of government where both the federal and state governments are sovereign with different, and occasionally concurrent, jurisdictions • Police power: The authority of government to regulate for the public welfare. In the United States, the police power generally is held by state governments • Hierarchical federalism: A federal system that recognizes both federal and state governments, but where state authority is limited to those authorities not exercised by the federal government or reserved to the people 2.2(b) Separation of Powers • Horizontal division of power between the executive, legislative and judicial branches of government • Doctrines of federalism and separation of powers prevent centralization of power in one person or branch of government o Checks and balances

2.3

PRESIDENTIAL, CONGRESSIONAL, AND JUDICIAL CONTROLS OF THE BUREAUCRACY • Generally, the Constitution does not address federal agencies 2.3(a) Bureaucracy Defined • Max Weber – “ a rational management system” o Advantages ▪ Division of labor ▪ Creation of specialists ▪ Rational, objective and purposeful rules ▪ Seniority and merit based promotion ▪ Hierarchy of officials within the system ▪ Strict discipline and control of public officials o Disadvantages ▪ Excessive empowerment ▪ Less oversight ▪ Less mobility between jobs ▪ Decreased workplace flexibility ▪ Increased red tape 2.3(b) Presidential Control • Congress creates, defines and funds agencies • The president enforces and administers the law o Common presidential complaint is their decreased control over domestic matters 18

▪

Independent agencies • Limit presidential influence • Are less susceptible to public accountability • Are not subject to traditional checks and balances o Presidents do exhibit some control ▪ Establishing some policy through executive orders ▪ Recommending reorganization and amendments to enabling laws ▪ Nominates agency heads • The president and Congress dispute the authority to remove federal officials o Congress clearly may remove federal officers (Article II, section 4 and Article I, sections 2 and 3) o The president is not authorized by the Constitution to remove federal officers but they have long asserted their right to do so ▪ Congress therefore has enacted legislation to limit the president’s right of removal o Morrison v. Olson allowed for a judicial board to appoint an independent counsel rejecting a separation of powers argument o Myers v. United States invalidated a statute requiring Senate approval to fire postmasters saying that the Congress may not interject itself into purely executive functions (affirmed in Bowsher v. Synar) o Humphrey’s Executor v. United States held that an FTC commissioner was not a purely executive official and the Congress could limit presidential power over such an official Clinton v. City of New York, 524 U.S. 417 (1998) Facts: Congress enacted the Line Item Veto Act in 1996 giving the president the power to cancel in whole any dollar amount of discretionary budgetary authority, any item of new direct spending and any limited tax benefit. President Clinton used this authority to cancel a provision of the Balanced Budget Act and two provisions of the Taxpayer Relief Act. The City of New York, claiming injury, brought suit.

Issue: Did President Clinton’s cancellation of the named provisions act as an amendment of the two Acts by repealing portions of each? Is such an action within the powers of the presidency?

Decision: Yes (regarding the amendment) No (regarding powers). “[R]epeal of statutes, no less than enactment, must conform with Art. I.” The president may accept an act of Congress by signing the act into law. If opposed to the act, the president may veto the act, but in doing so must return the act and Congress may overrule the veto. There are no provisions in the Constitution that allows a president to enact, amend or repeal statutes.

The actions in this case amount to both an amendment and a partial repeal of a statute which exceeds presidential authority. The Line Item Veto Act was deemed unconstitutional and was invalidated.

2.3(c) Congressional Control • Congress, of the three branches, possesses the greatest ability to control the bureaucracy o Congress can ▪ Create agencies 19

▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪

Disband agencies Reorganize agencies Establish agency budgets Set agency objectives and rules Engage in agency oversight Approve agency officers Ratify agency heads Utilize legislative vetoes

INS v. Chadha, 462 U.S. 919 (1983) Facts: Chadha is East Indian, born in Kenya and holds a valid British passport. He was lawfully admitted to the U.S. in 1966 with a nonimmigrant student visa. He overstayed his visa and a deportation hearing was held in January, 1974. He admitted to being deportable and the hearing was suspended to allow the filing of a suspension of deportation. In June, 1974 his deportation was suspended pursuant to a resolution of the House of Representatives.

Issue: Is a provision of the Immigration and Naturalization Act authorizing a single House of Congress, by resolution, the right to invalidate a decision of the Executive Branch, pursuant to authority granted by Congress to the Attorney General of the United States, constitutional?

Decision: No. The court recognized that the Framers were “acutely conscious that the bicameral requirement and Presentment Clauses would serve essential constitutional functions.” They further distinguished the procedures to require strict adherence.

Congress was designed to have both bodies agree on vetoes which did not happen in this situation. The single body veto provision was deemed unconstitutional and was severed from the Act. 2.3(d) Judicial Control • The courts are the final arbiter of Congressional mandates 2.4

CONCLUSION

LIST OF CHANGES/TRANSITION GUIDE This edition revises some of the objectives from the previous edition. Some of the numbering in the outline and section numbers have also changed. Passages from the following cases are also new in this edition: 907 Whitehead Street, Inc., d.b.a. Ernest Hemingway Home and Museum v.

Secretary of the U.S. Department of Agriculture 11th Circuit Court of Appeals (2012), National Federation of Independent Business v. Sebelius, and Arizona v. Intertribal Council of Arizona.

ADDITIONAL ASSIGNMENTS AND CLASS ACTIVITIES For a possible in-class class activity, consider holding a mock oral argument for one of the U.S. Supreme Court cases discussed in the chapter. The audio for oral arguments from the U.S. Supreme Court are also available at http://www.oyez.org/ which could be used in class. Students 20

could present oral arguments before justices. The justices could then ask questions during the oral arguments.

SUGGESTED ANSWERS TO END-OF-CHAPTER ASSIGNMENTS Review Questions 1.

An agency independent of the executive branch satisfies our founder’s vision of separation of powers. Since the president does not control the head of the agency, the agency can act with more autonomy and avoid political problems in the exercise of its functions.

2.

It has been argued that a disadvantage of having an agency independent of the executive branch is that the agency’s autonomy can lead to a lack of public accountability. The executive branch is also severely limited in its ability to remove agency heads that are not performing properly.

3.

Federalism is the concept of shared powers between the federal and state government.

4.

Separation of powers is a protection inherent in the Constitution in which each branch of the government is designated certain powers and other branches of the government act as a check and balance to protect against any one branch or person in the government from becoming to powerful and dominating the other branches. One example is that the Congress makes the laws, however, the president must agree by signing the law. The president may veto a law the executive branch disagrees with. Once enacted, the courts are charged with reviewing the law to determine its constitutionality should a law suit ensue. The Congress is further empowered to override a presidential veto, should they deem it appropriate with a two-thirds vote.

5.

The president exercises power over executive agencies by: • appointing, retaining and/or firing agency secretaries • recommending agency reorganizations and amendments to enabling laws to Congress • establishing policy through the issuance of executive orders • exercising authority as the direct head of executive agencies over their operation • recommending agency budgets

6.

Congress exercises power over executive agencies by: • using their power to create, disband or reorganize agencies • controlling agency budgets • setting agency objectives and rules that govern agency operations • engaging in oversight through its committees • reviewing, reversing and/or amending agency decisions

7.

Exclusive federal powers include the power to regulate: • The post office 21

• • • • •

Foreign diplomacy The making of treaties Naturalization Immigration and Emigration Bankruptcy

8.

Exclusive state powers include the power to regulate: • General health and welfare of its citizens • Police protection • Fire protection • Licensing of most professions • Education

9.

The federal and state governments share the power to regulate: • Taxation • The chartering of banks • The construction of roads • The borrowing of money • The punishment of crimes

10.

Contemporary administrative agencies pose a unique threat to freedom because the governmental bureaucracy has grown so enormous that it is not only difficult to control but even legitimate attempts at oversight are often so complex and time consuming that the president and Congress become overwhelmed. Many agencies have been enabled with multiple governmental responsibilities and therefore exercise executive, legislative and judicial functions in violation of our founder’s visions of separation of powers.

Overlapping powers can create bureaucratic stagnation and the growth of independent agencies has raised numerous questions as to the extent of executive as well as legislative control. Frequently oversight is relinquished in favor of waiting for judicial review.

Agencies challenge the separations of powers model because they perform the duties of all three branches of government, yet they fall into the executive branch. The challenge is to design a system where they remain accountable to the appropriate branch, but are not excessively hindered in getting the job done.

11.

Dual federalism is the name of a model where both the states and the federal government are co-sovereigns. Federal authority is limited and the Tenth Amendment specifically preserves state authority. Hierarchical federalism is a model that envisions a stronger federal government with expansive authority. The Tenth Amendment acts as a truism, that is, the state are left with the powers not legitimately claimed by the federal government.

Critical Thinking and Applications Problems 1.

Section One of this act, mandating nomination of commissioners by the president and confirmation by the Senate satisfies the appointment clause of Article II of the 22

Constitution and is therefore constitutional. Section Two of the enabling statute grants the committee quasi-executive, quasi-legislative and quasi-judicial functions thereby indicating that this is an independent rather than an executive agency. The Section One removal clause, requiring the proof of just cause, is therefore a constitutional limitation on the president’s authority to remove appointed commissioners.

2.

The congressional oversight provision is not constitutional. Section Three provisions of the statute delegating sole oversight authority to the House of Representatives contravenes our founder’s vision of how the separation of powers was to be exercised and violates the Presentment Clause and bicameral requirements of Article I of the Constitution. (See: INS v. Chadha)

3.

Student answers will vary.

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Chapter 3 Agency Discretion CHAPTER OVERVIEW Chapter 3 discusses agency discretion. A great majority of agency actions are informal. It is the exception, not the rule, in both rulemaking and adjudication, that formal procedures must be used. Agencies also perform many functions that fall outside the rulemaking and adjudication models. These acts are governed by the rules concerning informal procedures. However, because these actions constitute the bulk of administrative work, informal procedures are the “lifeblood of the administrative process.” Generally, informal actions are not governed by statute.

Accordingly, agencies exercise significant discretion when performing these functions. An agency has discretion when it has the authority to choose between two or more options. Too much discretion can lead to arbitrariness. Courts generally defer to agencies in the interpretation of the statutes that govern them known as the Chevron Doctrine.

CHAPTER OBJECTIVES After completing this chapter, the student should be able to • Explain why informal processes have been characterized as the lifeblood of the administrative process.

• Explain why too little discretion and too much discretion in government officials both present the possibility of abuse of authority. You should also be able to apply this understanding to real-life scenarios.

• Identify and describe three different forms of commonly exercised discretion by agency officials.

• Demonstrate comfort and familiarity with the style and format of judicial opinions.

• Brief a judicial opinion with little outside assistance. You should be successful in identifying the relevant facts. You should also be successful in identifying the legal issue and analyzing the court’s rationale in at least 33 percent of your briefs.

LECTURE OUTLINE 3.1

INTRODUCTION • The majority of agency action is informal • Agencies perform many functions other than rulemaking and adjudication • Generally, informal actions are not governed by statute • In the absence of statutory authority, agencies exercise discretion o Too much exercise of discretion leads to arbitrariness o Too little use of discretion leads to inflexible public administration

3.2 DETRIMENTS AND BENEFITS OF DISCRETION •

Excessive and unchecked discretion can lead to arbitrary decision making 24

•

• • •

The framers protected individual rights through: o The federal Constitution o State Constitutions o Statutory law Discretion is difficult to control Detailed policies have successfully helped police departments reduce deaths from high speed chases and excessive force Excessive rules in the workplace has caused confusion and inconsistent enforcement

3.3

LIMITS ON AGENCY DISCRETION • Congress has created significant limitations on the discretion of agency officials and others where officials possess considerable discretion • Discretion may be either unfettered or hampered by only minimal constraints • Agency discretion subject to judicial review and political accountability

3.4

EXAMPLES OF AGENCY DISCRETION 3.4(a) Prosecutorial Discretion • Executive agencies perform law enforcement functions which can include prosecutorial functions • Prosecutorial discretion includes: o Deciding who to investigate o Deciding who to prosecute o Deciding whether to settle a case o Other related decisions • Factors related to prosecutorial discretion include: o The likelihood of discovering a violation o The seriousness of the possible violation o The expense of the investigation o The inconvenience of the investigation o The expense of enforcement of discovered violations o The inconvenience of enforcement of discovered violations o Likelihood of a trial victory • Prosecutorial discretion is limited by: o Constitutional restrictions ▪ Race ▪ Gender ▪ Religion ▪ Sex General Motors v. Federal Energy Regulatory Commission, 613 F.2d 939 (D.C. Cir. 1979) Facts: The Federal Energy Regulatory Commission dismissed, without a hearing, a claim by General Motors regarding their complaint against a natural gas curtailment plan filed with the Commission by the Natural Gas Pipeline Company of America.

Issue: Did the Commission abuse its discretion in dismissing the complaint?

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Decision: No. “In general, an agency’s decision to conduct or not conduct an investigation is committed to the agencies discretion.” If the court is satisfied that the agency considered all relevant factors, proving a true and fair exercise of discretion, the agency’s decision is not reviewable. In this case General Motors concedes that the Commission examined the elements of their complaint and found no injury to General Motors, attributable to the curtailment plan, which would justify the relief requested.

Satisfied that this was a valid exercise of discretion, the court found no grounds to review the agency’s dismissal decision.

3.4(b) Rulemaking and Policy Discretion • Agencies are often empowered by Congress to promulgate regulations to further their mandate • An agency that exceeds its statutory mandate is said to act ultra vires • Ultra vires acts are either (or both): o Abuses of regulatory discretion o Unconstitutional acts • The Chevron Doctrine says that disagreement with an agency’s decision is no more a basis for a lawsuit than disagreement with a policy decision of Congress Gonzalez v. Reno, 212 F.3d 1338 (11th Cir. 2000) Facts: Elian Gonzalez was born in Cuba. When he was six years old, Elian, his mother, and twelve other Cuban nationals left Cuba in a small boat attempting to come to America. The boat capsized and eleven people, including Elian’s mother died. Elian was rescued by fishermen and brought to a hospital in Miami. Elian’s great uncle, a Miami resident petitioned for asylum to allow Elian to remain in the United States. In all, three separate asylum requests were filed. Elian’s father, in Cuba, petitioned to have Elian returned to him in Cuba.

Issue: Did the INS abuse its discretion by not adjudicating the asylum claims? Does Elian, a six year old minor, or a non-parental relative, have standing to file an asylum claim against the wishes of a parent?

Decision: No as to both. The first examination must be the language used by Congress in the statute. This language, if applicable to the situation, will be controlling. Here, while the statute gives “any alien” the right to apply for asylum, it does not proscribe procedures or identify required contents of the asylum application. Congress’s failure to explicitly express asylum particulars leaves a gap to be filled in by the agency administering the statute, the INS. The INS has determined that a parent of an unaccompanied minor will have the controlling decision and the court accepts this policy decision as within the range of reasonable choices available to the INS. “…we cannot conclude that the policy’s stress on the parent-child relationship is unreasonable.”

(The court did question whether the wishes of a parent outside of this country (also in a dictatorial state) should be given the same weight as decisions of a parent in the United States but never-the-less concluded that the INS policy was within its purview and therefore not reviewable.)

3.4(c) Claims and Applications Decisions • Processing claims and applications is an important function of many agencies 26

o Each agency has the right to determine its processing method o Discretion is limited by equal protection and due process 3.4(d) Protective Action • Certain agencies are charged with the protection of the health, safety and economic wellbeing of individuals and the public • Protective actions may include: o Recalls o Seizure of goods o Seizure of related items o Suspension of licenses o Ceases and desist orders o Actions for enforcement of civil penalties Brock v. Roadway Express, 481 U.S. 254 (1987) Facts: The Surface Transportation Assistance Act protects commercial motor transportation employees from discharge in retaliation for refusing to operate a motor vehicle that does not comply with applicable state and federal safety regulations.

Roadway Express discharged Jerry Hufstetler alleging that he intentionally disabled lights on his truck so he could be paid for the time while awaiting repairs. Hufstetler filed a grievance claiming that he was fired in retaliation for prior safety violation complaints.

Issue: When the dismissal occurred, were the predeprivation procedures, without an evidentiary hearing, adequate to protect both the employer’s and employee’s interests and not cause undue or irrevocable hardship?

Decision: Yes. While the employer has a right to discharge an employee for just cause, the severity of depriving a person of their means of livelihood must also be recognized.

The various interests of the employer, employee and the government must also be addressed. As long as the prereinstatement procedures establish a reliable initial check against erroneous decisions and a complete review is available, a prior evidentiary hearing is therefore not constitutionally required.

3.4(e) Tests and Inspections Generally • Agencies often establish testing and inspection requirements • The courts will review the validity and reliability of a test • The courts will not review: o Where tests are to be conducted o Whether a test is to be conducted o When a test is to be conducted • Fourth Amendment provisions limit an agency’s right to test regarding alcohol, drug and AIDS testing 3.4(f) Advisory Opinions and Declaratory Orders • Advisory opinions o Issued to help clarify particular issues regarding: ▪ Policy ▪ Practices ▪ Procedures 27

o Advisory opinions may or may not be binding, depending on agency policy and potential harm to the public • Declaratory orders o Administrative equivalents of judicial declaratory judgments o Resolves questions of law raised but not yet contested o APA limits declaratory orders to situations where a formal adjudication is required 3.4(g) Mediation and Arbitration • Mediation (aka conciliation) o Intervention with the goal of helping the parties to reach a decision o Mediators are go-betweens o Usually voluntary • Arbitration o Positions and arguments are submitted to a third party for a decision o Arbitrators are decision makers o May be voluntary or required by contract o May or may not be binding on the parties ▪ Binding decisions are not reviewable by the court except that arbitration itself may be reviewed as being appropriate to the situation • The Federal Mediation and Conciliation Service is an agency that mediates labor disputes o May arbitrate if both sides agree o Encourages arbitration to settle disputes 3.4(h) Other Action • The text is not and cannot be exhaustive with regard to describing all agencies that exercise discretion • Agencies must constantly deal with the dissemination of information 3.5

CONCLUSION

LIST OF CHANGES/TRANSITION GUIDE There are no major changes or revisions in Chapter 3 in the seventh edition. The language in the objective to “[i]dentify and describe three different forms of commonly exercised discretion by agency officials” has been from the previous object to “[i]dentify three different forms of commonly exercised discretion by agency officials.” The objective to “[d]efine advisory opinions and declaratory orders and explain how they are used in practice” has been removed but the chapter still discusses these concepts.

ADDITIONAL ASSIGNMENTS AND CLASS ACTIVITIES For a possible in-class class activity, consider having a class discussion on the Elian Gonzalez case and the decision in Gonzalez v. Reno, 212 F.3d 1338 (11th Cir. 2000). Considering running a search on YouTube for news coverage of Elian Gonzalez today and discuss the aftermath of the

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case in light of current immigration policies. Consider also have a discussion about the travel ban executive order issued by President Donald Trump in 2018.

SUGGESTED ANSWERS TO END-OF-CHAPTER ASSIGNMENTS Review Questions 1.

Rulemaking and adjudication require formal procedures, however, most agencies, in the course of their normal operation, perform functions that fall outside of the purview of rulemaking and adjudication so the agency, in order to function effectively, must be given discretionary authority to perform these other functions. It is literally impossible for the Congress to anticipate all of the rules and regulations which will be necessary for an agency to successfully function. Therefore, the right of an agency to informally promulgate necessary procedures, filling in gaps left by Congress in the enabling statute, is necessary for agency existence. Furthermore, attempts to formally apply strict procedures covering every possible scenario within an agency’s purview have continually proven to be confusing and counterproductive.

2.

There are a number of reasons that agencies select cases to investigate and prosecute rather than investigating and prosecuting all cases including: • Lack of human recourses to properly conduct investigations and prosecutions • Expense and inconvenience of investigation • Expense and inconvenience of enforcing a law if a violation is uncovered by the investigation • The likelihood of success

3.

An advisory opinion is a document issued by an agency, upon request, in which the agency interprets the applicable law and/or enumerates the agency’s policies, practices or procedures.

4.

Declaratory orders are issued to terminate a controversy or remove uncertainty in a matter in which a formal adjudication is required. Their purpose is to resolve matters of law that have arisen but have not yet been contested.

5.

Excessive and unchecked discretion can certainly lead to arbitrary decision making and an abuse of fairness. Although judicial review of discretionary agency decisions is limited, and there are few if any administrative procedures to protect individuals, constitutional rights of due process and equal protection remain as limitations on discretion and assurances of fundamental fairness. Public accountability is also an external check on discretionary abuse.

6.

Rules alone cannot solve every problem. Promulgation of rules, designed to limit discretion, can prove effective in remedying particular problems. Excessive numbers of rules however, can lead to a paralysis in the attempt to monitor and comply with every rule that applies. As a result, individuals and business must sometimes pick and choose those rules that they will attempt to comply with. The agency charged with promulgating 29

and enforcing an excessive amount of rules can also be forced to exercise discretion in picking and choosing those rules they will enforce. In those areas in which there are very few specified rules, the agency’s discretion is magnified as they must fill in gaps necessary for the agency to function. Without specific direction, the agency must use discretion to make decisions in order to maintain effectiveness and fulfill its function.

Under Chevron an agency’s interpretation of an ambiguous statute or its own rule is given substantial deference by reviewing courts, provided Congress intended for the agency to possess the authority to make rules. If such authority was not intended, then the agency’s interpretation is “entitled to respect” only if it is persuasive (Skidmore). An agency is much more likely to be upheld if the former if found to be the case.

Critical Thinking and Application Problems 7.

1.

Three reasons Philip Howard believes that discretion is necessary in public administration include, 1) discretion is necessary to ensure humanity in governance; 2) discretion cannot be eliminated because excessive rule making actually leads to a need for the exercise of discretion when an agency must decide which rules to enforce; and 3) rule makers cannot anticipate all eventual circumstances or developments and rules themselves cannot solve every problem so discretion must be used for unanticipated scenarios and dilemmas.

Student answers will vary as they discuss opposing arguments and the proof needed to support their arguments contrary to Howard’s beliefs.

2.

Student answers will vary. There were numerous examples of agency discretion discussed in this chapter including but not limited to: • The Occupational Health and Safety Administration deciding which of its thousands of rules to enforce • Prosecutorial discretion was discussed in relationship to Alaska and the Department of Justice • General Motors v. Federal Energy Regulatory Commission, discussed the Commission’s discretion to determine whether or not to conduct an investigation • The Food and Drug Administration having the discretionary right to choose available remedies for enforcement of their rules • Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc. discussed an agency’s discretionary right to fill in gaps left by Congress in an enabling statute • The Consumer Product Safety Commission having the discretionary right to choose available remedies for enforcement of their rules

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Chapter 4 The Requirement of Fairness CHAPTER OVERVIEW Chapter 4 discusses the requirement of fairness with respect to administrative agencies with specific attention to the requirements of due process and equal protection. Due Process includes both procedural due process and substantive due process. Procedural due process describes the minimum steps that must be taken by a government before it can deprive a person of life, liberty, or property. Substantive due process is concerned not with the procedures used to make a rule or adjudicate an individual case, but with the substance of a rule or adjudication. This chapter focuses on what constitutes life, liberty, and property. Chapter 4 also examines what level of protection is given for various forms of property, including government employment, licenses, and government benefits. Equal protection is concerned with laws and actions that classify and treat people differently.

CHAPTER OBJECTIVES After completing this chapter, the student should be able to • Identify the various protected interests, and the specific rights therein, secured by the Due Process and Equal Protection Clauses.

• Describe due process cost-benefit analysis.

• Apply due process cost-benefit analysis to factual scenarios where the government is seeking to deprive a person of a protected interest, reaching a conclusion about the minimal process that must be followed.

• Describe and apply the three review standards for due process and equal protection cases.

• Brief a judicial opinion with little outside assistance. You should be successful in identifying the relevant facts. You should also be successful in identifying the legal issue and analyzing the Court’s rationale in at least 33 percent of your briefs.

LECTURE OUTLINE 4.1

DUE PROCESS IN GENERAL • Fifth Amendment: “No person shall be deprived of life, liberty or property without due process of law” o Applies to federal government actions • Fourteenth Amendment is identical in language and applies to State government actions • Due process requires that the government treat all persons with a minimum amount of fairness when taking life, liberty or property o Procedural due process – process the government must use o Substantive due process – the actual essence of the laws and rules ▪ Law must evidence a rational relationship to a legitimate government interest or objective (rational relationship test) ▪ Substantive due process protects against arbitrary laws 31

• • See Table 4-1 4.2

Strict scrutiny applies when a fundamental right or a suspect class is regulated o Strict scrutiny requires a compelling governmental interest A substantial relationship is a middle ground test

PROTECTED INTERESTS 4.2(a) Life • Agency connections could include: o Providing or depriving of utilities o Approving or disapproving benefits 4.2(b) Liberty • Agency connections could include; o The right to move about o Granting or denying parole o Detaining illegal aliens o Preserving an individual's reputation 4.2(c) Property • Entitlements o Government entitlements are no longer revocable at will o Goldberg v. Kelly looked at the rights-versus-entitlements issue and determined that “it may be more realistic today to regard welfare entitlements as more like ‘property’ than a ‘gratuity’ and that a person has a protected property interest in a benefit that they have a legitimate claim or expectation to • Governmental Employment • Garcetti v. Ceballos Facts: Ceballos was a calendar deputy in a prosecutor's office. He wrote two memos and made some statements concerning a case he was involved in. He alleges that he was subjected to employment retaliation in violation of the First Amendment for his oral and written statements about the case. After the case, he was transferred to a lower position as trial deputy, he was transferred to another location, and he was denied a promotion.

Issue: Was Ceballos’ work related speech protected by the First Amendment?

Decision: No. Although public employees do not shed their First Amendment rights entirely, they must accept limits on their rights as a condition of public employment.

Statements of public employees made in the normal course of their duties are not protected by the First Amendment. The court distinguished this case from Pickering and other precedent by separating speech made outside of one’s duties that are of public concern (and subject only to restrictions needed to maintain efficiency and effectively) and speech that is work related. To insulate work related speech would be to protect employees from performance related discipline and review. o There is no right to government employment ▪ Once employed however, a protected interest may occur ▪ A protected interest in benefits may also occur based on due process if an entitlement has occurred

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Perry v. Sindermann, 408 U.S. 593 (1972) Facts: Robert Sindermann was a teacher in the state college system of the State of Texas.

After teaching at two schools in the system over six years, he began teaching at Odessa Junior College, a state system school. He taught at Odessa for four years under four one year contracts. During his stint at Odessa he was appointed as co-chair of his department.

During Sindermann’s fourth year, he was elected president of the Texas Junior College Teachers Association. Serving as president, he spent time testifying before Texas legislative committees and became involved in public disagreements with the college’s Board of Regents. At the expiration of his one year contract the Board of Regents voted not to renew his contract.

Issue: Did the decision not to rehire him deprive him of an interest in liberty or a vested property interest in continued employment?

Decision: Yes. Odessa Junior College did not have a formal tenure system. The official Faculty Guide contained a statement regarding tenure which says: Teaching Tenure: The Administration of the College wishes the faculty member to feel that he has permanent tenure as long as his teaching services are satisfactory and as long as he displays a cooperative attitude towards his coworkers and his superiors, and as long as he is happy in his work.

Sindermann further showed reliance on a guideline of the Coordinating Board of the Texas College and University System that stated that a teacher who had taught in the system for seven years was considered to have some form of job tenure. As a result, he has no less a due process right than does a formally tenured professor. Sindermann therefore has a legitimate claim of entitlement to continued employment absent proof of sufficient cause for termination.

•

• •

Licenses o Any licensing decisions, whether to grant or to revoke, must meet due process and equal protection tests ▪ A licensing scheme that favors one race, sex or a particular suspect group is likely unconstitutional Utilities o Service provided by the government cannot be terminated without an opportunity to contest the charge or prove that payment was made Education o There may be a protected interest in attending: ▪ Public school ▪ College ▪ University ▪ Other educational programs

Goss v. Lopez, 419 U.S. 565 (1975) Facts: Nine students in the Columbus, Ohio, Public School System (CPSS) were suspended from various public high schools for periods of up to ten days. The suspensions resulted from various disruptive and destructive acts. Ohio laws empower 33

the principal of a public school to suspend a student for up to 10 days or to expel the student. Parents, in both cases must be notified within 24 hours and expelled students may appeal the decision. There is no procedure for a suspended student to appeal.

Issue: Is a short suspension from school a deprivation of the student’s rights such that due process is violated where no appeal process exists?

Decision: Yes. Education is a vital state and local function. Total exclusion from the educational process, even for a short period is a serious event in the life of the student. Charges recorded on the student’s record further may serve to be detrimental in the student’s future. “Fairness can rarely be obtained by secret, one-sided determination of facts decisive of rights…” School authorities do not require that they be totally free from notice and hearing requirements to operate schools efficiently.

Therefore, in matters of suspensions of 10 days or less, administrators must at minimum provide suspended students with oral or written notices of the charges and give the students the opportunity to present their side of the story. These minimal requirements will help guard against unfair or arbitrary decisions. In matters regarding suspensions of more than 10 days, more formal procedures may be required.

4.3

COST-BENEFIT ANALYSIS • Due process requires that notice of a possible deprivation and hearing be provided to the affected party o The form of the notice depends on the type of case • Due process requires that there be an opportunity to respond to the notice • The interest of the individual receiving extended procedural protections must be weighed against the interest of the government in minimizing the process o Erroneous deprivation of rights through inadequate procedures must be guarded against

4.4

NOTICE • The right to notice is central to due process • Notice includes: o What an agency has done o What an agency is about to do o Sufficient and timely notice of hearings (Required by the APA) ▪ Date ▪ Time ▪ Location o Immediate post action notice and hearing is required following summary actions

4.5

HEARING 4.5(a) Where • Location must be such that participating parties are not severely burdened by appearing • Due process may dictate that a hearing take place near a parties residence if he or she has no money or transportation 4.5(b) What 34

• •

Due process does not require trial like hearings in all cases Many administrative hearings are informal o Fairness, not form, is paramount • Evidentiary hearings are not required: o When test results or scientific information is the vital case fact o When legislative rather than adjudicative facts are established 4.5(c) When • Providing a fair hearing after a decision is made generally satisfies due process o Exceptions exist ▪ See Goldberg below ▪ Emergency situations o Predetermination hearings are not required in most cases • Factors considered to determine the appropriateness of a pre or post determination hearing: o The additional harm to the individual from not requiring a predetermination hearing o The value that requiring additional process will have to the individual o The likelihood of errors absent additional safeguards o The cost and burden imposed by requiring additional safeguards o Other public concerns Goldberg v. Kelly, 397 U.S. 254 (1970) Facts: Residents of New York City brought suit complaining that their financial aid under the federally assisted program of Aid to Families with Dependent Children (AFDC) and under New York State’s General Home Relief Program was being terminated or was about to be terminated without prior notice and hearing, depriving them of due process.

Issue: Yes. Does the termination of welfare benefits require a predetermination for adequate due process to be met?

Decision: Yes. The court recognized that some governmental benefits may be administratively terminated without predetermination evidentiary hearings. In cases involving welfare, welfare is a necessary means to food, clothing, shelter and medical care. The termination of these benefits may deny the individual the very means by which to live while awaiting a post determination hearing. Governmental interests in this case, do not override the potential harm to the individual. The predetermination hearing need not be judicial in form, it need only be fair.

Gilbert v. Homar, 520 U.S. 924 (1997) Facts: Richard Homar was a police officer at East Stroudsburg University (ESU), part of the Pennsylvania State System of Higher Education. While at the home of a friend, he was arrested pursuant to a drug raid. He was charged with possession of marijuana, possession with intent to deliver and criminal conspiracy to violate the controlled substance law. The conspiracy charge was a felony. Upon receiving notice of the arrest and charges, Homar was immediately suspended without pay. The criminal charges were later dropped, however the suspension remained in effect while ESU conducted their own investigation. A hearing was conducted for Homar to tell his side of the story during 35

which he was notified that the State Police had written a report containing damaging statements. Homar was not informed of the nature of the statements nor was he given a copy of the report. Subsequently, Homar was notified that he was being demoted to a groundskeeper position along with a reduction in salary. Homar was also awarded back pay from the beginning of his suspension at the officers pay rate. A hearing regarding the demotion was held and the demotion decision was sustained. Homar contended that the suspension and withholding of pay without a predetermination hearing was violative of due process.

Issue: Did Homar have a significant private interest in an uninterrupted receipt of his paycheck despite the pending criminal charges?

Decision: No. Homar only faced a temporary suspension and was afforded a timely hearing. The state has a significant interest in immediately suspending an employee who occupied a position of trust while felony charges are pending. While Homar contends that the public trust could be maintained by suspending him with pay, the court finds no such requirement on the government. Furthermore, ESU was acting pursuant to an Executive Order issued by the Governor of Pennsylvania requiring immediate suspension, without pay, for anyone charged with a felony. Arrest and formal charges negate the need for a predetermination hearing.

Ingraham v. Wright, 430 U.S. 651 (1977) Facts: Many of the 237 schools located in Dade County Florida, employed corporal punishment in the discipline of disobedient and insubordinate students. A flat wooden paddle was used to strike the students buttocks one to five times and there is no evidence of physical injury to the student.

Issue: Is corporal punishment (paddling) violative of Eighth Amendment prohibitions against cruel and unusual punishment and Fourteenth Amendment due process requirements requiring prior notice and opportunity to be heard?

Decision: No as to both arguments. The court decreed that the prohibition against cruel and unusual punishment does not apply in a school setting. Corporal punishment without prior notice or hearing does has an effect on the student’s constitutionally protected liberty interests however; due process is preserved through common law remedies for invasion of personal security and damages against school officials who administer erroneous, unjust or excessive punishment. This right of recovery is qualified by the concept of justification, protecting a teacher who administers only “moderate correction” to a student.

4.5(d) Counsel • The APA provides that anyone compelled to appear before an agency are entitle to assistance of counsel • Due process provides the same rights in state agency situations • The right to assistance of counsel does not include the appointment of counsel • The right to retained counsel does not apply to all administrative hearings • There is no right to counsel if the issues examined are not purely factual or legal, such as: o At prison disciplinary hearings o Some probation revocation hearings 36

o School suspension guidance conferences 4.6

EQUAL PROTECTION • Fourteenth Amendment (Equal Protection Clause): no state shall “deny to any person within its jurisdiction the equal protection of the laws.”

• Fourteenth Amendment equal protection is implicit in the Fifth Amendment Due Process Clause and is therefore a limitation on the federal government • A law may be consistent with equal protection but an agency’s enforcement of that law may be violative of equal protection o Requiring applicants for medical licenses to have graduated medical school 4.6(a) The Tests • Supreme Court has developed a three-tiered test to determine if equal protection is violated (same test is used regarding due process questions) o Rational relationship test ▪ Is the objective of the law itself lawful?

▪ If yes…Does the law bear a rational relationship to that objective? o Strict scrutiny test ▪ Used when the law includes a classification of intrinsically suspect groups or classification is based on an immutable condition o Substantial relationship test ▪ Largely undefined but is an intermediary test between rational relationship and strict scrutiny • Discrimination violates equal protection and may be overt or covert o Overtly discriminatory laws are “discriminatory on its face” ▪ Certain races are barred from… o Covertly discriminatory laws are not obvious and harder to prove ▪ Illegality is in purpose not necessarily impact ▪ Statistical evidence is often required for proof • Laws that create classifications that burden individual rights often violate equal protection and are subject to strict scrutiny o Right burdened must be fundamental, such as: ▪ Speech ▪ Religion ▪ Travel ▪ Access to courts ▪ Franchise o The burden must be substantial ▪ Rights affected but not significantly burdened are subject only to the rational relationship test FSK Drug Corp. v. Perales, 960 F. 2d 6 (2d Cir. 1992) Facts: FSK Drug Corporation (FSK) is a registered pharmacy and had been a Medicaid provider for over twenty years. Pursuant to 1987 New York State law, they were required to submit an application and re-enroll as a provider. Following an on site inspection and an inspection of FSK’s billing records, the application was denied by the 37

New York State Department of Social Services (Department). FSK appealed and the appeal was denied. FSK alleges that the department was selective in their enforcement of the law, requiring only large pharmacies and doctors to re-enroll while excusing hospital pharmacies and drug chains from re-enrollment.

Issue: Did the Department selectively classify applicants and evaluate applicants with different criteria, violating equal protection?

Decision: No. The court reviewed two decisive factors: (1)was the person, treatment based on an intention to discriminate on the basis of impermissible conditions or based on a malicious or bad faith intent to injure the person. Since discrimination was not alleged, the court only reviewed the question of malicious or bad faith intent to injure. It was shown that everyone involved with Medicaid was required to re-enroll, including hospital pharmacies and chains. At the time of the court’s decision, 315 applications had been received with 39 denied and 167 still pending. The court found no evidence of bad faith or malicious treatment.

4.6(b) Affirmative Action and Diversity • Affirmative action is concerned with giving an advantage to historically disadvantaged groups o This raises equal protection questions • Regents of University of California v. Bakke examined the University of California quota system designed to hold a certain number of seats in the medical school for minorities. The court required a strict scrutiny test for all racial classification systems and concluded that a strict quota violated equal protection.

Race however, could be an admissions factor when considered in the context of other factors when diversity is a goal.

• Adarand Constructors v. Penna restated the requirement that strict scrutiny be used in racial classification cases and that affirmative action programs need to be narrowly tailored. o Narrowly tailored programs require that if a race neutral alternative exists to remedy a problem, that alternative must be used if practical Grutter v. Bollinger, 539 U.S. 306 (1993) Facts: The University of Michigan Law School initiated an admissions policy that sought to create a high quality diverse student body. To this end, a number of variables were reviewed for each applicant. The applicant’s GPA and LSAT scores were considered, along with other “soft” variables including; the quality of the applicant’s undergraduate school, the strength of the applicant’s recommendations, the quality of the applicant’s essay and the “applicant’s likely contributions to the intellectual and social life of the institution.” The goal was to create a diverse population that enriched everyone’s education. Different types of diversity were not given substantial weight although the desire to reaffirm the school’s commitment to racial and ethnic diversity was stated. Enrolling a critical mass of underrepresented students was seen as beneficial to the success of the diversity initiative. No spots were reserved for the underrepresented nor was there a quota or numerical advantage provided. Barbara Grutter is a white Michigan resident who applied with a 3.8 GPA and a 161 LSAT score. She was initially placed on the waiting list and subsequently rejected. Evidence was presented that if race 38

had not been considered, the school’s minority population would have been only one third as large as it was.

Issue: Was the school’s use of race in its admission criteria an improper classification and a violation of the Equal Protection Clause?

Decision: No. The court discussed whether the use of race, in this case, was justified as a compelling state interest. The court deferred to the school’s educational judgment that diversity was beneficial to its mission. The court also agreed that diversity provides valuable educational benefits. Since no specified percentage was allocated to the freshman class and the schools critical mass is defined by reference to educational benefits rather than by a quota the policy is not violative of the Fourteenth Amendment.

The race conscious admissions policy used race as a plus, but remained flexible. Race was only one of many factors in the overall decision-making policy, not a single determinative one. Non-minorities were not, according to the court, unduly harmed. (The fact that the policy was not intended to be permanent, and would be terminated as soon as practical, was also deemed crucial by the court. The court estimated that the policy would be unnecessary in 25 years.)

4.6(c) Fifteenth Amendment • The right to vote shall not be “denied or abridged by the United States or by any State on account of race, color, or previous condition of servitude.”

Rice v. Cayetano, 528 U.S. 495 (2000) Facts: The Hawaiian Constitution limits the right to vote for nine trustees chosen in a statewide election regarding the Office of Hawaiian Affairs (OHA). The OHA administers programs designed to benefit “native Hawaiians” and “Hawaiians” as determined by lineage as of 1778. Only this who belong to either of the named groups may vote for these nine trustees. Rice is a Hawaiian by the generally accepted common usage but not Hawaiian in terms of lineage as of 1778 and therefore may not vote for the trustees.

Issue: Does this limitation on voting rights violate Rice’s Fifteenth Amendment rights?

Decision: Yes. The Fifteenth Amendment was passed soon after the civil war and race and servitude were paramount issues at the time with the amendment. Ancestry can be a proxy for race and is such in this case. This is a statewide election for elected state officials and Rice’s disqualification is based on not being a descendent of native Hawaiians. This violates the intent of the Fifteenth Amendment and is unconstitutional.

4.7

CONCLUSION

LIST OF CHANGES/TRANSITION GUIDE There are no major changes or revisions in Chapter 4 in the seventh edition. The wording for the first objective has been revised to read “[i]dentify the various protected interests, and the specific rights therein, secured by the Due Process and Equal Protection Clauses” from “[i]dentify the various forms of rights secured by the Due Process and Equal Protection clauses” found in the sixth edition. The image on page 88 with the caption “President Trump signs Veterans bill in 2017” is new for the seventh edition.

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ADDITIONAL ASSIGNMENTS AND CLASS ACTIVITIES For a possible in-class class activity, consider having a panel discussion on affirmative action and diversity. Consider inviting guests from the university admissions office, diversity officers, and elected student leaders as guest speakers or for the panel discussion. Students in the class could ask questions on the school’s affirmative action and diversity policy.

SUGGESTED ANSWERS TO END-OF-CHAPTER ASSIGNMENTS Review Questions 1.

Fifth; Fourteenth 2.

Strict scrutiny 3.

Notice; hearing 4. c 5. b 6. d 7.

F 8.

T 9.

F 10.

F Critical Thinking and Application Problems 1.

Regarding the insurance issue - Jane should be covered for her accident because she has a reasonable expectation to receive the insurance benefits. The clerical error wrongfully has denied her benefits and the expected 80% should be paid ($40,000).

Regarding her continued employment - Since Jane did not receive notice of the hearing and was not therefore afforded an opportunity to represent herself, the procedure leading to her termination was defective and violative of her rights. Unfortunately, the statute requires her termination so the issue eventually becomes moot. Even if she was awarded a post termination hearing, her termination would not be reversed due to the statute.

2.

Ordinarily, due process requires a predetermination hearing in which an affected party can present evidence and state their side of the case. Where public health and safety is an issue, a predetermination hearing may be waived if there is sufficient evidence that prompt action is required. As long as a prompt post determination hearing is conducted, due process rights are preserved. In this instance, actual felony indictments, along with the other permanent evidence is sufficient to warrant the termination without the predetermination hearing. Furthermore, the prompt post determination hearing was indeed conducted and the Doctors rights were preserved. The subsequent acquittal has no bearing on the legitimacy of the clinics actions.

3.

Student answers will vary. Students should be aware of the fact that unemployment and disability benefits are generally not immediately provided to those eligible and a lag time

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ensues before benefits are paid. This varies from state to state. A question that should be asked is whether the lag time is sufficient for a post determination hearing?

4.

a.

Since this policy is based on classification by race, a strict scrutiny test will be applied to the minority preference provision. The courts do not condone policies that are not flexible and do not evaluate the entire situation. Race may be a consideration and provide a plus to the bidder, but the automatic application of the 10% rule is too facially discriminatory and violates Depend Able Construction’s equal protection rights. b.

Since neither race, nor any other suspect group is a focus of this policy, strict scrutiny will not apply. The policy does however create a discernable classification of experienced contractors. The courts will likely employ the substantial relationship test to determine whether the rule bears a substantial relationship to a governmental objective.

Since the initially stated objective is to find the lowest bidder, a preference based on experience bears no direct relationship and is invalid. Even employing the least stringent test, the rational relationship test, the policy would not likely be found acceptable.

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Chapter 5 Delegation CHAPTER OVERVIEW Chapter 5 focuses on delegation. When Congress delegates its authority to make laws to an agency, the agency is receiving quasi-legislative authority. When Congress gives an agency the responsibility to hear disputes as a court would, the agency has been delegated quasijudicial power. This chapter discusses delegation of both legislative and judicial authority and supporting cases. Increasingly, both federal and state governments are delegating judicial and lawmaking authority to private organizations, transforming these organizations into quasigovernmental bodies. Delegations of authority to private parties present different legal questions than delegations to governmental actors.

CHAPTER OBJECTIVES After completing this chapter, the student should be able to • Define delegation and explain how and why delegations occur in the administrative context.

• Explain the history, citing cases for each point you make, of delegations of legislative authority.

• Explain the state of the nondelegation doctrine today, as well the legal standard(s) that are applied to delegations of legislative and judicial authorities, citing cases to support your points.

• Explain why delegations of authority to private parties present different legal questions than delegations to governmental actors.

• Explain why the delegation of criminal law, arrest, and detention authority to agencies is of greater concern than other delegations, and identify two or more limitations that exist for the delegation of these authorities that doesn’t apply to other delegations.

• Brief a judicial opinion with little outside assistance. You should be successful in identifying the relevant facts. You should be successful in identifying the legal issue and analyzing the court’s rationale in at least 33 percent of your briefs.

LECTURE OUTLINE 5.1

WHAT IS DELEGATION • The act which creates an agency by Congress is called enabling legislation o Defines the agency’s mandate o How the mandate is to be satisfied o The agency’s structure o How the agency head is to be determined o Authority of the agency (executive authority) • Congress can delegate executive, legislative and judicial authority to an agency 42

•

•

5.2

o Delegation of law making authority is called quasi-legislative authority o Delegation of authority to hear and resolve disputes is called quasi-judicial authority Congressional delegation can violate the Constitution when: o It delegates too much of its authority o It delegates its own essential functions or an essential function of the judiciary o The delegation gives one branch oversight or control over an agency that is performing the functions of another branch The separation of powers limitations on congressional authority is synonymously called either: o The delegation doctrine o The nondelegation doctrine (negative approach)

DELEGATING LEGISLATIVE AUTHORITY • Article I, Section 1 of the Constitution grants all legislative authority to Congress • Agency rulemaking power is not mentioned in the Constitution • In Schlecter Poultry Corp. v. United States, the president’s authority to approve codes of fair competition was invalidated because the enabling act stated conflicting goals. Since no solid policy was established, any delegation of authority was therefore unlawful Panama Refining Co. v. Ryan, 293 U.S. 388 (1935) Facts: Pursuant to authorization contained in Section 9(c) of Title 1 of the National Industrial Recovery Act, the President issued an Executive Order prohibiting the transportation of petroleum and other products in interstate and foreign commerce. A second Executive Order authorized the Secretary of the Interior to exercise all of the powers vested in the president for the purpose of enforcing Section 9(c). Subsequently, the Secretary of the Interior issued numerous regulations to carry out the President’s orders. The Panama Refining Company sued to restrain federal officials from coming upon their lands, gauging their tanks and digging up pipe lines to enforce certain of the Secretary of the Interior’s regulations. They also questioned the propriety of the delegation of legislative power as unconstitutional.

Issue: Were Title I and Section 9(c) of the National Industrial Recovery Act constructed properly, allowing for valid delegation of authority to the President and the Secretary of the Interior?

Decision: No. Section 9(c) was determined to be unambiguous. It does not control production of petroleum within states nor does it require that particular rules be followed.

It does not direct the President to act in a particular way or at a particular time. Title I states a general policy with the purpose of removing obstructions to the free flow of interstate and foreign commerce and favors the fullest possible utilization of the present productive capacity of the industries. No specific policy is declared or defined. The President was therefore empowered to select policy as he pleased. Nothing in Title I limits or controls authority conferred in Section 9(c). Therefore, the unfettered delegation of authority to the President results in too much legislative authority being granted and is therefore invalid and unlawful.

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5.3

THE NONDELEGATION DOCTRINE TODAY • Since 1935, the nondelegation doctrine has not been used by the Supreme Court as a constitutional basis to strike down any delegation of legislative authority o The Supreme Court continues to recognize the doctrine ▪ Congress must establish fundamental legislative policy ▪ Only gap filling can be left to the agency • Courts refer to the nondelegation doctrine: o In terms of standards ▪ A set or rules or guidelines from which the agency or person must work o As an “intelligible principle” ▪ Congress must provide legitimate comprehensible guidelines limiting agency authority • In Arizona v. California, the Secretary of the Interior was delegated authority to apportion water from the Colorado River through the Boulder Canyon Project Act. The delegation was found to be valid because the Secretary was ordered to consider a number of various factors in making water use decisions. This was deemed to provide the Secretary with sufficient standards with which to work.

• The court upheld a delegation to administrative officers, in Lichter v. United States, to recover “excessive profits” by renegotiating contracts involving war goods. The term “excessive standards” was challenged as vague, however the court found the term sufficient to establish an appropriate standard.

• In Mistretta v. United States, Congress delegated to the United States Sentencing Commission the task of drafting sentencing guidelines for use by federal judges.

Opponents claimed that the delegation was improper because it delegated the legislative function of establishing punishment for criminal behavior. The delegation was upheld because an intelligible principle was established in that: o The commission was mandated to use current standards as a beginning point o The purposes and goals of sentencing were determined by Congress o The commission had to work within statutorily prescribed minimums and limits • In Bowsher v. Synar, Congress was found to be overreaching when it gave the Comptroller General certain budgetary implementation responsibilities. Congress was found to be inappropriately attempting to control an executive officer in violation of the separation of powers doctrine Touby v. United States, 500 U.S. 160 (1991) Facts: Petitioners were convicted of manufacturing and conspiring to manufacture Euphoria, a schedule I drug, pursuant to the Controlled Substance Act. Section 201 of the Act authorized the Attorney General to add or remove substances or to move substances from one schedule to another. The Attorney General was required to follow specifically named procedures in order to exercise this authority.

• The Attorney General must first obtain a scientific and medical evaluation from the Secretary of Health and Human Services 44

o A substance cannot be scheduled if the Secretary recommends against it • The Attorney General must then consider eight factors regarding the substance including: o Potential for abuse o Evidence of pharmaceutical effect o Psychological dependence liability o Physiological dependence liability o Whether the substance is an immediate precursor of a substance already controlled • The Attorney General must comply with notice-and-hearing provisions of the APA This procedure took six to twelve months to complete so drug traffickers were able to make minor chemical composition changes and design “new” drugs which stayed ahead of law enforcement efforts. To remedy the problem, Congress amended the Act to authorize the Attorney General to schedule a substance on a temporary basis when doing so is “necessary to avoid an imminent hazard to the public safety.” The Attorney General promulgated regulations delegating to the DEA his powers under the Act including the power to schedule controlled substances on a temporary basis. Euphoria was temporarily scheduled pursuant to this authority and Daniel and Lyrissa Touby were arrested when a Euphoria drug laboratory was discovered in the basement of their home.

Issues: Was the authority to temporarily schedule substances an unconstitutional delegation of power to the Attorney General? In matters involving criminal sanctions, should a higher standard than stating an “intelligible principle” be adopted?

Decision: The nondelegation principle does not prohibit the delegation of authority by Congress as long as the delegation is within proper limits. Petitioners concede that the delegation of authority in this case states an “intelligible principle” constraining the Attorney General’s authority. The court agreed that the “intelligible principle” was met and even exceeded by the numerous procedural requirements placed upon the Attorney General. The fact that temporary scheduling was designed to be used only when “necessary to avoid an imminent hazard to the public safety” reinforces the establishment of an “intelligible principle”. The court did not address the issue of whether something more than an “intelligible principle” is required in cases involving criminal sanctions.

“We need not resolve the issue today. We conclude that 201 (h) passes muster even if greater congressional specificity is required in the criminal context. The fact that the Act vests both scheduling and prosecutorial powers in one person or office is not a constitutional separation of powers issue but may be an issue simply of the wisdom of the congressional delegation.

Whitman v. American Trucking Associations, 531 U.S. 457 (2001) Facts: Section 109 (a) of the Clean Air Act requires the Administrator of the EPA to promulgate national ambient air quality standards (NAAQS) for each air pollutant for which air quality criteria have been issued under section 108. Once NAAQS have been created, the Administrator must review the standards at five year intervals and make necessary and appropriate revisions. These cases arose when the Administrator revised the NAAQS for particulate matter and ozone. Section 109 (b)(1) instructs the EPA to set NAAQS the attainment and maintenance of which in the judgment of the Administrator, 45

are requisite for the protection of the public. An adequate margin of safety was to be included in the NAAQS. The Court of Appeals determined that an “intelligible principle” had not been stated and that the nondelegation doctrine had been violated.

Issue: Was section 109 (b)(1) a valid delegation of authority based on the establishment of an “intelligible principle”?

Decision: Section 109 (b)(1) states that the EPA establish sufficient national standards in order to protect the public health. These standards are based on published air quality criteria that are based on current scientific knowledge. The limits imposed on the EPA are similar to the ones approved in Touby v. United States as well as other cases. The scope of discretion was determined to be well within the limits of the Court’s nondelegation precedents. The Court further determined that the Congress had established an “intelligible principle” validating the statute.

(Note: The decision reviewed a number of cases in which the “intelligible principle” had been an issue in various situations.)

South Dakota v. Department of Interior, 69 F. 3d 878 (8th Cir. 1995) Facts: The Lower Brule Tribe of Sioux Indians submitted an application under 25 U.S.C. §465 asking the Secretary of the Interior to acquire ninety-one acres of land in trust for the tribe to develop into an industrial park. The State of South Dakota and the City of Oacoma protested in writing to the Secretary’s Bureau of Indian Affairs then appealed to the Interior Board of Indian Affairs. After the application was approved without notifying the complainants, this action was filed. Plaintiffs allege that they are harmed because the acquisition of land in trust for the Indian tribe will deprive them of tax revenues and place the land outside of their regulatory powers. Plaintiffs further allege that § 465 provides no legislative standards or boundaries governing the Secretary’s acquisitions.

Issue: Did the Congressional delegation of authority violate the nondelegation doctrine?

Decision: As long as the Congress establishes through a legislative act an intelligible principle regulating the exercise of delegated power it has not unlawfully delegated its legislative power. A delegation is overbroad if it lacks standards for the governance of delegated authority. Here, the Secretary’s power to acquire land ranges from the purchase of a factory to the purchase of a golf course. There are also no stated conditions, which the Secretary should apply to determine where and when to purchase property in trust. The delegation therefore lacks perceptible boundaries and “intelligible principles”. At minimum, an authorized public use needs to be stated. This was not done. The court concluded that § 465 fails all nondelegation criteria and is invalid. The Secretary therefore has no authority to acquire the lands in question.

•

5.4

In Doe v. Bush, Presidential war making power was at issue. The court decided that war-making power is a shared power between the President and Congress and that the nondelegation doctrine has less applicability in matters of foreign affairs than it does in domestic affairs.

DELEGATING JUDICIAL AUTHORITY • Article III vests judicial power in “one Supreme Court and in such inferior courts as the Congress from time to time ordain and establish”.

46

• • • • •

• •

•

•

Federal judges under Article III are nominated by the President and approved by the Senate Federal judges appointed under Article III have lifetime tenure Non-article III judges are not addressed as to tenure and appointment Since 1792, the Supreme Court determined that federal judges could not be assigned tasks that could be reviewed by nonjudicial officials Crowell v. Benson addressed the delegation of power to non-Article III officials.

Congress delegated the authority to hear worker’s compensation claims under the Longshoremen’s and Harbor Workers Compensation Act to an administrative agency. The Court held that the Congress may delegate the adjudication of public rights (individual v. government) to non-Article III tribunals while the adjudication of private rights (individual v. individual) had to be made by Article III courts. It was assumed that Article III courts had the right to review the agency decisions. o The distinction between public and private rights was an important determination that continues to be addressed District judges are empowered under Article III Magistrates are created through the Federal Magistrates Act o Magistrates are therefore non-Article III o Magistrates may be removed by Article III judges o In Gomez v. United States, it was determined that Magistrates may not conduct voir dire without the consent of the parties because voir dire is a critical stage in the proceedings that must be supervised by a constitutionally empowered judge Decisions of Magistrates are reviewed de novo by district judges o In Peretz v. United States, the parties agreed to allow a Magistrate to conduct voir dire however on appeal, one of the parties protested citing Gomez. The Court stated that the ultimate decision to invoke the Magistrates assistance was by the district court and was subject to veto by the parties. The district court also retains the decision as to whether to empanel the jury selected by the Magistrate. Since the process was entirely under the district court’s control, the delegation to the Magistrate was legitimate. Affirming Gomez, the court reasoned that the parties had the right to demand that an Article III judge preside over the critical stage of the proceedings.

Bankruptcy Court judges are not Article III judges o Bankruptcy is a public right created by Congress o Bankruptcy often involves private rights disputes which Bankruptcy Court judges traditionally decide ▪ In Northern Pipeline Construction Co. v. Marathon Pipe Line Co., the Supreme Court found the adjudication of private rights by Bankruptcy Court judges, over the objections of a party, to be unconstitutional • Following Northern Pipeline, the bankruptcy laws were amended to allow Bankruptcy Court judges to adjudicate 47

•

private claims with the consent of the parties with these decisions reviewable by Article III judges In Commodity Futures Trading Commission v. Schor, Congress had delegated to the Commodity Futures Trading Commission the authority to hear a specific class of public rights claims. The agency increased its authority to hear counterclaims, including certain private rights claims, arising out of the same facts that were the basis of the original claim. The court upheld the delegation because: o Congress had created a legitimate comprehensive scheme to deal with a broad policy area and the delegation of judicial authority was only a small part of the scheme o The agency had the authority to hear only a small class of claims o The counterclaimant had the right to file in federal court o The agency had to look to an Article III judge to enforce its orders and its orders were reviewable de novo by an Article III judge o The scheme did not threaten the independence of the judiciary

Foley v. Osborne Court Condominium, 1999 R.I. Super. Lexis 50 (1999) Facts: Foley owned two condominium units in the Osborne Court Condominium. The condominium association, of which all unit owners were members, adopted rules and regulations addressing noise, parking and other problems. Foley was cited for violating these rules and after being given notice and an opportunity to be heard, was fined by the association. The fines went unpaid, so the association placed liens on the property and then commenced a sale of the units. Prior to the final sale an agreement was reached and a settlement agreed to. Subsequently, the plaintiff was cited again for rules violations, fined and a foreclosure threatened. The foreclosure was averted when Foley filed this law suit.

Issue: Was the 1982 Rhode Island “Condominium Law”, an unconstitutional delegation of judicial or police power to the condominium association, a private entity?

Decision: The court found that a condominium association may assess fines. The court was troubled however, by the association’s assessment of daily fines which accrued to a point where the unit owner’s equity was exhausted, resulting in a foreclosure. They likened this authority to a court’s power to punish for civil contempt. The 1982 Act delegates to an association the power to determine and assess fines and then enforce its orders depriving a violator of their property. This represents an unconstitutional delegation of judicial or police power to the condominium association, a private entity.

5.5

DELEGATING TO PRIVATE AGENCIES • It is increasingly common for governments to contract with private agencies o Governments often lack the expertise to perform necessary functions o Privatization reduces the size of government o Private companies often are more productive o When a newly evolving need arises, the government may lack certain resources to promptly address the situation • Detractors to privatization claim: o The framers did not intend to create an efficient government ▪ Efficiency was traded for liberty 48

• • • •

o Privatization threatens the public good because the government gives up some control Core governmental functions may not be delegated to private parties A delegation of quasi-legislative functions are more likely to be permitted than a delegation of quasi-judicial functions Private agencies that perform governmental functions are treated as governmental agencies by the courts The private agency receiving the delegation must be positioned to serve the public interest o Legislation must not provide a private agency an unfair market advantage over its competitors ▪ In Carter v. Carter Coal Co., Congress, in the Bituminous Coal Act, delegated the authority to regulate certain aspects of the coal industry to the largest coal producing companies in America. The court struck down this delegation saying that it granted to the majority, the power to regulate over an unwilling minority.

Regulating the industry was determined to be an essential governmental function.

5.6

CRIMINAL LAW, ARREST AND DETENTION • The executive branch is responsible for enforcing the law • Investigation and prosecution of criminal activities have not posed delegation issues • Delegations of penal rulemaking and penal adjudicatory power have been delegation issues o Rulemaking ▪ Delegations of criminal rulemaking or judicial authority to private agencies are likely unconstitutional ▪ Limited delegations of criminal rulemaking to public agencies are appropriate, however; • Delegation of the power to set penalties is not permitted o Adjudicatory power ▪ Minor civil wrongs may be adjudicated by agencies • Certain misdemeanors and violations have been recharacterized as civil wrongs o i.e. - Parking and traffic violations ▪ Constitutional rights and privileges afforded to criminal defendants may not be delegated • Agencies may not order the imprisonment of individuals as punishment • Arrest and detention may be allowed in extreme circumstances o Detaining through quarantine, those who pose a threat to the community o Those with psychiatric problems who pose a threat to themselves or society o Detention of illegal aliens through order of the attorney general

5.7

CONCLUSION 49

LIST OF CHANGES/TRANSITION GUIDE The following objective has been added to the seventh edition: Explain why the delegation of criminal law, arrest, and detention authority to agencies is of greater concern than other delegations, and identify two or more limitations that exist for the delegation of these authorities that doesn’t apply to other delegations. In addition, the word “nondelegation” replaced the term “delegation” for the following objective: Explain the state of the nondelegation doctrine today, as well the legal standard(s) that are applied to delegations of legislative and judicial authorities, citing cases to support your points. In the outline, the sections on criminal law, arrest, and detention—which previously were two sections—have been combined to one section.

ADDITIONAL ASSIGNMENTS AND CLASS ACTIVITIES For a possible in-class class activity, consider holding a mock Senate Judiciary Committee hearing on a proposed court-packing plan similar to President Franklin D. Roosevelt's courtpacking plan discuss. Imagine the U.S. President's major legislative attempts have been struck down by the U.S. Supreme Court and the President has proposed a new court-packing plan to expand the number of justices on the court. Students in the class could serve as Senators or witnesses to discuss the plan.

SUGGESTED ANSWERS TO END-OF-CHAPTER ASSIGNMENTS Review Questions 1.

Delegation is the granting of quasi-legislative, quasi-judicial and/or quasi-executive authority or power to an agency.

2.

Since most agencies fall under the executive branch, an agency possessing executive authority is usually not a separation of powers problem. The doctrine is important to limit the Congressional delegation of legislative and judicial power to agencies.

3.

Congress delegates authority to agencies because Congress doesn’t always have the expertise to full regulate all the areas under their purview. Agencies are often better positioned to develop the proficiency and resources to develop a proper regulatory scheme.

4.

Under the public rights doctrine, claims against the government and other public rights cases may be heard by non-Article III judges. Cases involving private rights must be heard by Article III judges unless the parties waive their rights.

5.

In the 1930’s President Franklin D. Roosevelt, frustrated by numerous Supreme Court decisions invalidating New Deal legislation as well as over 1600 injunctions against enforcement of New Deal legislation, attempted to increase the membership of the Supreme Court by appointing a new justice for each current justice over 70 years old. It was his plan to ‘pack’ the court with members who would share his philosophy and allow 50

his policies to succeed. The scheme is significant to administrative law because if it had been implemented, it would have eroded the protections afforded the public through the separation of powers doctrine and harmed judicial independence.

Critical Thinking and Application Problems 1a.

The delegation of quasi-legislative power is constitutional. Congress established an intelligible principle when they enumerated specific goals and specific standards for the President or designee to operate under. Furthermore, the public purpose of the delegation is clearly stated.

1b.

The delegation of quasi-judicial power is not constitutional because the magistrates are not subject to review by Article III judges. Delegating the sole review power to the President or designee is a delegation of excessive power to the executive branch violating the separation of powers doctrine.

1c.

Student answers will vary.

3.

Yes, this is a constitutional delegation. Private organizations can be delegated quasilegislative authority to establish rules and regulations when the Congress has established an intelligible principle to follow. Congress has properly prohibited the private entity from establishing penalties.

4.

This is not a constitutional delegation. Private entities may not enforce criminal penalties because this is considered a core government function. At times, minor criminal matters may be reconstituted to become civil in nature allowing private entity authority however this has not occurred. In no case may a private entity enforce a penalty of imprisonment.

The delegation of the right to appoint administrative law judges by the president of the private entity will be suspect and likely problematic because the judiciary is very protective of its authority and looks disapprovingly on delegations of quasi-judicial authority.

5.

Section 3 is unconstitutional because decisions of non-Article III judges must be subject to de novo review by Article III judges.

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Chapter 6 Agency Rulemaking CHAPTER OVERVIEW Chapter 6 focuses on agency rulemaking. When an agency acts in its quasi-judicial capacity, its behavior is referred to as adjudicatory. When acting in its quasi-legislative capacity, its behavior is referred to as rulemaking. Rulemaking is the process whereby agencies establish law to implement or perform a statutory duty. The rulemaking provisions of the APA establish the minimum procedures that agencies must use to develop and promulgate rules. The two forms of rulemaking, informal and formal, are supplemented by presidential, congressional, and selfimposed hybrid procedures.

CHAPTER OBJECTIVES After completing this chapter, the student should be able to • Distinguish rulemaking from adjudication in fact scenarios.

• Describe how the volume of rules promulgated by agencies has grown in U.S. history.

• Identify the various forms of rulemaking, explain the circumstances in which each is used, and describe the process used to create each type of rule under the APA. • Identify and describe the various ways rulemaking authority is controlled.

• Brief a judicial opinion with little outside assistance. You should be successful in identifying the relevant facts. You should also be successful in identifying the legal issue and analyzing the Court’s rationale in at least 50 percent of your briefs.

LECTURE OUTLINE 6.1

IN GENERAL • Quasi-judicial authority is called adjudicatory power • Quasi-legislative authority is called rulemaking o Rulemaking is the agency establishment of law to implement or perform a statutory duty o Frequently, agencies use rulemaking powers to fill in gaps or explain details undefined in legislation • Regulations are subordinate to statutes but have equal weight when applied • The authority to establish substantive rules must stem from an enabling statute o The legislative delegation of authority must be reasonable ▪ Unreasonable delegations will be invalidated by the courts ▪ Delegations that concern suspect classes or fundamental rights are subject to strict scrutiny o Authority to create substantive rules cannot be assumed by an agency • Tests applied to determine whether an agencies rules are valid, reasonable and appropriate: (see chapter 4) 52

o Rational Relationship Test o Substantial Relationship Test o Strict Scrutiny Test 6.2

RULEMAKING AND ADJUDICATION DEFINED • Section 551(4) of the APA defines a rule as the “whole or a part of an agency statement of general or particular applicability and future effect designed to implement, interpret or prescribe law or policy or describing the organization, procedure or practice requirements of an agency”. o Rules – actions intended to have a future effect o Generally directed at large groups • Adjudication is a process that investigates, declares and enforces liabilities as they stand on present or past facts and under laws supposed already to exist…” – Justice Holmes o Generally directed at individual claims • See the Figure 6-2 • Due process concerns (see chapter 4) o Agencies may often make rules without conducting hearings o Adjudication requires notice and an opportunity to be heard

6.3

THE VOLUME OF RULES • Most law in America is made by administrative agencies, not directly by legislatures o Congress makes hundreds of laws per year o Agencies promulgate thousands of laws per year See Figures 6-3 and 6-4 6.4

TYPES OF RULES • There are two types of rules o Legislative rules • Procedural • A legislative delegation of authority provides implicit authority to establish procedures necessary to enforce and implement the agency’s mandate • Substantive • There is no inherent authority to create substantive rules • Congress must delegate this authority • Necessary gap-filling may be allowed if Congress’s intent is clear • Courts may not substitute their judgment for that of a substantive agency rule o Interpretive rules • Used to inform the public of how a rule will be implementing or enforcing a rule • They do not declare anything new 53

• • 6.5

• They do not fill in gaps • They do not have the force of statutes No express or implied delegation of authority is required to authorize an agency to issue interpretive rules Courts generally give great weight to interpretive rules

RULEMAKING PROCEDURE • Agencies are not Constitutionally required to conduct hearings or provide notice of proposed rules o Congress has however, established procedures that agencies must follow o Agencies themselves have adopted rules which increase their procedural obligations thereby ensuring fairness 6.5(a) Formal Rulemaking • Implemented when rules are required by statute to be made on the record after an opportunity for an agency hearing (APA §553(c) o Required when mandated by Congress by statute o The APA alone never mandates formal rulemaking • Formal rulemaking is time consuming, costly and procedurally involved o For example, a Food, Drug and Cosmetic Act related series of hearings regarding the single issue of whether peanut butter should contain 87.5% or 90% peanuts, conducted by the FDA: ▪ Generated over 100,000 pages of transcript ▪ Took over 12 years • Procedures: o Notice must be provided to the public ▪ Notice must include: • Substance of the proposed rule • Description of the subjects or issues involved • Legal authority to act must be referenced o An evidentiary hearing must be conducted ▪ Interested persons must be given the opportunity to present evidence and cross-examine witnesses • Rules of evidence are relaxed o Written testimony may be substituted for oral, however the party must submit to cross-examination or written testimony is disqualified • There is no jury ▪ Ex parte communications are prohibited between decision makers and interested parties o The agency must issue its rule ▪ Rule becomes final if not appealed within 30 days ▪ Rule must be in writing ▪ Reasoning must be included • The APA allows for these procedures to be omitted when compliance with these procedures would detrimentally affect the agency’s execution of its functions 54

United States v. Florida East Coast Railroad, 410 U.S. 224 (1973) Facts: The Interstate Commerce Commission provided notice of a hearing to establish incentive per diem charges on standard box cars based on information supplied by the railroads. The ICC announced in the notice that they would receive submissions from the railroads only in written form. The railroads argue that the written form limitation was prejudicial and procedurally improper.

Issue: Was a full evidentiary hearing required permitting the oral testimony of the interested parties involved?

Decision: No. The language of the statute was undoubtedly a mandate to the ICC to consider the factors set forth in reaching their decision, however, Congress did not specify the method by which the commission should acquire the information. Therefore, a formal rulemaking hearing was not required and the written form submission requirement was not prejudicial and procedurally improper.

6.5(b) Informal Rulemaking • Under the APA, informal rulemaking exists by default • Three procedural requirements o Notice to the public must be published ▪ Proposed rule must be described ▪ Legal authority to act must be referenced o Interested parties must be allowed to participate ▪ Primarily by written statement ▪ Oral testimony may be permitted ▪ There is no trial type hearing o Final rulings must be published with “a concise statement of their basis and purpose” (APA § 553(c)) ▪ Issues must be identified and agency’s reaction to each ▪ Identification of facts relied upon to arrive at decisions ▪ Becomes final if not appealed within 30 days See Figure 6-5 for a comparison of formal and informal rulemaking under the

APA

6.5(c) Beyond the APA’s Requirements: Hybrid Rulemaking • Inclusion of additional steps to the informal procedural requirements such as: o Allowing for oral comment o Requiring testimony and cross-examination o Advance notice of proposed rulemaking preceding normal notice o Disclosure of methodology or notice of intent to rely on scientific or technological methods utilized to reach decisions • Congress may require certain hybrid procedures for certain agencies o i.e. – The FTC must conduct oral hearings regarding Magnuson-Moss Act issues governing unfair trade practices • The President may mandate certain hybrid procedures in certain agency actions o Various Executive Orders requiring economic impact studies and justifications for rulemaking that effects the economy 55

•

Courts had frequently directed agencies to exceed basic notice-comment requirements to preserve Due Process o This process was found improper in Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council

Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council 435 U.S. 519 (1978) Facts: The facts of the case are not stated and are not relevant due to the procedure based nature of the decision.

Issue: Should a court have the right or power to impose procedural rulemaking procedures on an agency?

Decision: Agencies are free to grant additional procedural rights in the exercise of their discretion but reviewing courts are generally not free to impose them if the agencies have not chosen to grant them. Courts may only rarely review and overturn agency decisions regarding procedure.

6.5(d) Exempted Rulemaking • Each of the following is exempt from APA procedural requirements o Exemption applies to all rulemaking requirements ▪ Military issues ▪ Foreign affairs ▪ Agency management issues o Exemption applies to notice and public participation only and Justification for utilizing this exemption must be included in the final order ▪ Government personnel matters ▪ Creation of interpretive rules ▪ Creation of procedural rules • There is a catchall exemption whenever the notice-comment procedure is “impractical, unnecessary or contrary to the public interest” o Justification for utilizing this exemption must be included in the final order 6.5(e) Negotiated Rulemaking • A congressional hybrid • An amendment to the APA permits agencies to negotiate the development of proposed rules with specific interested parties • Used only when there are a limited number of interested parties • The following factors must be considered: o Is there a need for the rule? o Are the numbers of parties affected by the rule limited? o Can a representative committee be formed that will negotiate in good faith? o Is it likely that the committee could reach a consensus? o Will the agency provide the committee with the resources necessary to do their job? o Will rulemaking be delayed unnecessarily?

56

o Will the agency use the negotiated rule?

• Procedures: o Notice of negotiated rulemaking must be published o Interested parties, the agency and a mediator meet o Meetings must be open to the public o Standard notice-comment procedure must be adhered to 6.5(f) Advisory Committees • A form of hybrid rulemaking • Encouraged, and at times required, by Congress and the President • Advisory Committee meetings are open to the public 6.6

RATEMAKING • Ratemaking is a legislative function • Free from Due Process concerns when dealing with an entire industry • Due Process does apply if the ruling applies to a singular entity o Process is considered adjudicatory o Electric and gas companies • APA rulemaking procedural requirements apply when performing legislative functions • APA rulemaking procedural requirements and Due Process requirements apply when performing adjudicative functions

6.7

TAXATION AND REVENUES • Taxing by Congress creates no Due Process concerns • The authority to tax may be delegated by Congress to an administrative agency o Agencies must satisfy Due Process issues o Revenue-raising rulemaking must be based on a stated “intelligible principle”

6.8

CONTROLLING RULEMAKING AUTHORITY • Agency officials generally possess considerable rulemaking discretion o Processes used o Rules governing the processes o Timing • There are checks and limitations o The APA procedural requirements o Congress can grant, limit or withhold powers o Congress may require hybrid procedures o The President may impose hybrid procedures o Courts may apply judicial review to agency rules o Agencies frequently impose rules upon themselves FDA v. Brown & Williamson 120 S. Ct. 1291 (2000) Facts: The Food and Drug Administration (FDA), applying the Food, Drug and Cosmetic Act (FDCA), declared tobacco and tobacco products, primarily cigarettes and smokeless tobacco, as drugs and promulgated rules and regulations relative to their use.

57

These regulations were aimed at reducing use and consumption amongst children and adolescents.

Issue: Has the wording of the FDCA, along with other Congressional mandates, excluded tobacco and related tobacco products from regulation by the FDA? Decision: Acknowledging the problems created by tobacco, the court said that, “Regardless of how serious the problem an administrative agency seeks to address, however, it may not exercise its authority in a manner that is inconsistent with the administrative structure that Congress enacted into law.” The court concluded that Congress has clearly precluded the FDA from exercising jurisdiction in the area of tobacco. This was based on a review of the FDCA’s regulatory scheme and the fact that specific tobacco related legislation had been promulgated by Congress. The goal of the FDCA is for the FDA to ensure that any product that it regulates be safe and effective for public use. Were the FDA to regulate tobacco, safe and effective use could not be shown and the FDA would be required to ban it. Specific other legislation previously passed by Congress, has denied the removal of tobacco products from the market place. Congress was well aware of the dangers posed by tobacco yet refused to implement a ban. Instead the Congress mandated an advertisement and notice requirement to warn and protect the public. The court therefore determined that the FDA lacked authority to conduct rulemaking in this area.

6.9

CONCLUSION

LIST OF CHANGES/TRANSITION GUIDE The objectives at the beginning of the chapter are revised for the seventh edition. The section on REAL ID Act on pages 152-153 is new to the seventh edition. The reference to the Executive Order entitled Reducing Regulation and Controlling Regulatory Cost starting on page 161 is also new for the seventh edition. In addition, Figures 6-3 and 6-4 are also updated.

ADDITIONAL ASSIGNMENTS AND CLASS ACTIVITIES For a possible activity or assignment, have students research proposed regulations on regulations.gov and find a proposed rule that interests the student. Students could then submit a comment on the proposed rule as part of the rulemaking process. Students could present to the class or the instructor a summary of the proposed rule and their comments on the proposed rule.

SUGGESTED ANSWERS TO END-OF-CHAPTER ASSIGNMENTS Review Questions 1.

Notices of a proposed rulemaking are published in the Federal Register.

2.

The authority to create substantive rulings stems from the Congressional enabling statute creating the agency. The courts have allowed agencies to create substantive rules when not directly authorized in the enabling statute when gap filling is necessary and is 58

consistent with a clear intent of for the agency to do so. Authority to promulgate procedural rules and interpretive rulings is inherent.

3.

R - Affects future behavior A - Involves past behavior R - Is directed at large groups A - Normally involves few people R - Decision is based on policy concerns A - Decision is based on specific facts A - May result in individual (or corporate) sanctions R - Establishes standards of conduct on which a person or entity may be sanctioned in the future

4.

Evidentiary/trial type

5.

The three informal rulemaking procedural requirements are: 1.

Public notice 2.

Opportunity for interested parties to participate 3.

The agency must render a decision

6.

7.

8.

9.

10.

Not exempt Exempt Not exempt Exempt Rule or regulation

11.

Negotiated rulemaking occurs when interested parties are invited to participate in the development of a proposed rule by an agency. The APA requires that the following factors be considered: 1.

Is there a need for the rule?

2.

Are the numbers of parties affected by the rule limited?

3.

Can a representative committee be formed that will negotiate in good faith?

4.

Is it likely that the committee could reach a consensus?

5.

Will the agency provide the committee with the resources necessary to do their job?

6.

Will rulemaking be delayed unnecessarily?

7.

Will the agency use the negotiated rule?

12.

Ways in which Congress may control agency rulemaking include: • Providing an intelligible principle to guide the agency • Creating hybrid procedures • Repealing or amending administrative rules • Withholding or limiting agency authority in the enabling statute Ways in which the President may control agency rulemaking include: • Promulgating Executive Orders defining agency authority 59

o o o o

Requiring economic impact studies regarding proposed rules Requiring an economic justification for final rules Requiring consultation with states regarding any rules affecting the states Requiring heads of agencies to attempt to conform regulatory programs to presidential policy objectives Critical Thinking and Applications Problems 1.

No specific rulemaking procedures are required. This is an interpretive ruling.

2.

The statute requires that a hearing be conducted before a rule is established. This requirement falls short of a requirement that the rules be made “on the record and after an opportunity for an agency hearing.” Therefore, only informal rulemaking procedures are required. Public notice of the proposed rulemaking must be published, a hearing must be conducted with interested parties given the opportunity to provide input and a final notice must be made by the FDA appearing in the Federal Register in accordance with the APA.

3.

Student answers will vary.

4.

Student answers will vary.

60

Chapter 7 Agency Information Collections and Investigations CHAPTER OVERVIEW Chapter 7 focuses on investigations and collection of information by administrative agencies.

Information is the lifeblood of agency decision making. Agencies depend on information when promulgating rules and conducting adjudications, and in all other aspects of performing their mandate. An agency may require that these records be held subject to review by the agency, or the record producer may be required to provide the records to the agency. The Fourth Amendment to the U.S. Constitution limits the authority of agencies to conduct tests and inspections. The Fourth Amendment is applied differently in the administrative context than in the criminal justice context.

CHAPTER OBJECTIVES After completing this chapter, the student should be able to • Identify at least three methods discussed in the chapter that agencies use to collect information (or require records to be maintained) from people and businesses under the federal law.

• Explain how the Fourth Amendment to the U.S. Constitution limits the authority of agencies to conduct tests and inspections, citing at least two of the major cases discussed in the chapter. You should also be able to explain why the Fourth Amendment is applied differently in the administrative context than in the criminal justice context.

• Apply the law (e.g., APA, Fourth Amendment) that you learned to case scenarios involving agency information collection and inspections.

• Brief a judicial opinion with little outside assistance. You should be successful in identifying the relevant facts. You should also be successful in identifying the legal issue and analyzing the court’s rationale in at least 50 percent of your briefs.

LECTURE OUTLINE 7.1

RECORDKEEPING AND REPORTING • Recordkeeping – requiring that record be maintained • Reporting – requiring that records be produced for examination • The APA does not mandate specific record keeping or reporting requirements o The APA does provide that reporting may be required by other laws • Agencies may require record keeping or reporting when: o The agency has jurisdiction over the subject and individual concerned; and, o The requirement is reasonable and not overly burdensome; and, o The information is not privileged • A regulated party may be excused from record keeping or reporting requirements if: 61

o Harm will come from compliance such as: ▪ Disclosure of trade secrets ▪ Disclosure of patented information o The request violates a common law or statutory privilege United States v. Morton Salt Co., 338 U.S. 632 (1950) Facts: The Federal Trade Commission required corporations to provide reports showing how they complied with the Commission’s cease and desist order issued pursuant to a Court of Appeals decree. Four years later, the Commission ordered additional and highly particularized reports designed to show continuing compliance with the original order and decree.

Issue: Did the Commission have the authority to require these additional reports as to compliance?

Decision: Yes. The Federal Trade Commission Act authorizes the Commission to require and obtain reports pursuant to their regulation of competition. Special reports, supplemental to annual reports are directly authorized. The court determined that the agency’s power ‘to investigate from time to time the organization, business, conduct, practices and management of any corporation engaged in commerce…” provided sufficient authority for the Commission to require supplemental reports designed to evidence continued compliance by those under the Commission’s jurisdiction.

7.1(a) Fifth Amendment Aspects • The Fifth Amendment provides protection against self incrimination o A person with a reasonable belief that criminal information may be used against them may claim a privilege and not report the information o If by statute, the information is exempt from being reported outside of the agency, the agency may then require the reporting of information proving criminal activity, but such information can’t be used to prosecute the individual ▪ i.e. – A prostitute may be required by the IRS to report income derived from illegal activity, however, the IRS is prohibited from passing on the information to law enforcement agencies o The privilege against self-incrimination applies to individuals only and does not extend to corporations o The privilege does not apply to information in the possession of third parties o An individual may voluntarily waive their rights 7.1(b) Immunity • The Attorney General of the United States must approve the granting of immunity by agencies • Three types of immunity: o Transactional immunity ▪ Shields a witness from prosecution of all offenses related to the testimony provided ▪ Independently obtained evidence may not be used to prosecute the witness 62

▪ Witnesses may be compelled to testify o Derivative use immunity ▪ Shields a witness from prosecution based on information learned from the testimony provided ▪ The witness is subject to prosecution based on independently obtained evidence ▪ Witnesses may be compelled to testify o Use immunity ▪ Only prohibits the government from using the witness’s testimony against them ▪ Evidence derived from the compelled testimony may be used against them ▪ Statutes that provide for use immunity only are unconstitutional See Figure 7-1 for compelling testimony 7.2

INSPECTIONS, TESTS AND SEARCHES • Inspections may be conducted to view: o Records o Conditions o Premises • Inspections are typically less expensive to businesses and individuals than record keeping or reporting • The APA does not specifically authorize inspections o It does provide for inspections “authorized by law” • The APA states that no hearing is necessary when adjudicative decisions are based solely on: o Tests o Inspections o Hearings 7.2(a) Fourth Amendment and Privacy Laws • Today’s law considers agency inspections to be searches subject to Fourth Amendment requirements • Courts have relaxed the standards for administrative inspections o Administrative searches are not designed to uncover crimes ▪ If criminal evidence is sought, the Fourth Amendment fully applies o Today’s complex society mandates that agencies be given very broad authority to enforce their mandates ▪ Particularly regarding social problems and issues o The court recognizes a lower expectation of privacy at a business premises than that expected by an individual at home • Observations in public places are not considered searches • Searches occur when an area is observed where the owner or possessor has or expects a reasonable level of privacy • Searches require compliance with Fourth Amendment standards o Probable cause must be shown 63

• •

•

o A warrant must be obtained Warrantless searches are only valid where an exception exists In criminal cases, warrants require: o A showing of probable cause o A supporting oath or affirmation o Specificity regarding the premises to be searched or the items to be seized In administrative cases: o Administrative warrants do not require probable cause but only reasonable inspection standards ▪ Reasonable inspection standards support area inspections ▪ This exception applies to businesses but not to private individuals or private areas o Closely regulated business may be subject to completely warrantless searches o Administrative warrants are not valid in criminal cases

Camera v. Municipal Court 387 U.S. 523 (1967) Facts: A public housing inspector was notified that a possible violation of the housing code had occurred in a particular building. The inspector attempted to enter and inspect the premises but was denied permission to do so because the inspector lacked a search warrant. The inspector returned two days later and was again denied permission to inspect because no warrant had been issued. A citation was mailed to the occupant to appear at the district attorney’s office which was ignored. Two inspectors visited the premises and were again denied entry because of the lack of a warrant. A criminal complaint was then issued and the appellant was arrested.

Issue: Do local housing inspectors have the right to conduct area inspections without meeting Fourth Amendment probable cause requirements?

Decision: Yes. It is a recognized fact that the only effective way to seek universal compliance with the minimum standards required by municipal codes is through routine periodic inspections. Area code enforcement inspections have a history of judicial and public acceptance. Public protection interests demands that all dangerous conditions be prevented or abated. Area code enforcement inspections are administrative rather than criminal in nature. The evidence of a reasonable government interest therefore validates the applicability of area code enforcement inspections.

Note: The arrest of the appellant was invalidated because no emergency demanding immediate access was shown and the inspectors could have obtained a warrant but instead visited the premises three times without one. The arrest was therefore deemed excessive.

7.2(b) Drug, Alcohol, AIDS, and DNA Testing • Drug testing has been upheld regarding employees of nuclear power plants o Employee privacy interests in a closely regulated business are not deemed as strong as that of other employees o The government has a compelling interest to protect the public from nuclear disaster

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•

•

o Employee privacy concerns must be addressed regarding administration and scrutiny of the actual testing In National Treasury Employees Union v. Von Raab, the Commissioner of Customs promulgated rules requiring drug testing of employees transferring into positions involving drug interdiction, positions requiring the use of weapons and/or positions that involve the handling of classified materials o The testing was upheld because: ▪ It was administrative in nature ▪ The commissioner specified that any adverse information obtained cannot be used for criminal prosecution ▪ The governments interest in testing outweighed the privacy rights of the individuals due to the special nature of the positions In Chandler v. Miller, the Georgia legislature passed a statute requiring candidates for public office to submit to drug testing o The court declined to find a governmental special need and declared the statute unconstitutional ▪ The scheme was flawed and did not adequately support the governments interest • Testing dates were specified so by abstinence, drug users could prep and pass the test • Office holders do not usually perform high risk or safety sensitive tasks so a public protection interest is not evident

Skinner v. Railway Labor Executive Association 489 U.S. 602 (1989) Facts: The Federal Railroad Administration, pursuant to the Federal Railroad Safety Act promulgated regulations mandating blood and urine tests of employees involved in certain train accidents. They also created regulations that authorize, but do not require, breath and urine testing of employees for violation of certain safety rules.

Issues: 1. Do the tests described above constitute searches regulated by Fourth Amendment protection requirements? 2. If so, do the Fourth Amendment protection requirements apply in this situation?

Decision: 1. Yes, drug and alcohol testing is considered a search ordinarily regulated by the Fourth Amendment. Such testing of individuals is an invasion of their privacy, which should be protected and regulated. 2. No. The compelling governmental interest regarding the protection of the public from disaster outweighs the privacy interests of the employees, making the tests constitutionally valid. The court also concluded that constitutional Fourth Amendment probable cause requirements could be relaxed due to the administrative rather than criminal nature of the testing. Reasonableness rather than probable cause was therefore sufficient to authorize testing in this matter. The evidence sought was such that the evidence disappeared over time, falling under destruction of evidence exceptions to criminal search warrant cases. Privacy issues were addressed and minimized by having professional supervise the tests rather than co-workers and tests were done in an unwitnessed environment.

Veronia School District v. Action 515 U.S. 646 (1995)

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Facts: In the mid to late 1980s a sharp increase in the use of drugs was observed by faculty and administrators in the Veronia schools. By the late 1980s, discipline in the schools had deteriorated and incidents of disciplinary referrals had more than doubled over the early 1980s numbers. Student athletes were identified not only as drug users but also as leaders of the drug culture. School officials became concerned not only with the proliferation of drugs in general but also by the heightened possibility of sports related drug induced injuries. Special lectures and classes were instituted however the drug problem continued unabated. Finally, the school board instituted the Student-Athlete Drug Policy. This policy required that each student-athlete sign a consent form permitting drug testing before the season commenced. Parents were required to provide consent also. Furthermore, throughout the season, 10% of the athletes would be randomly selected for supplementary tests. The student’s privacy is maintained during the testing. Should a test result in a positive result, a second confirming test is administered as soon as possible as a control. James Action, a seventh grader was prohibited from playing football because both he and his parents refused to consent to the testing.

Issue: 1. Does a minor student-athlete have the same privacy rights and expectations as other citizens? 2. Does the school district have a compelling or special interest that justifies suspicionless drug testing in this context?

Decision: 1. No, a minor, by virtue of their age and lack of emancipation, lack certain rights of self-determination. They are subject to the physical control of their parents or guardians. While in school, the state assumes a form of temporary custody as the schoolmaster. Students are routinely required to be screened for vision, hearing, dental and dermatological issues. Furthermore, particular vaccinations are mandatory. Studentathletes, by virtue of the locker room environment have even less legitimate privacy expectations. It is also understood that privacy is diminished by going out for the team and subjecting oneself to particular team rules. 2. Yes, the school district by producing evidence of heightened drug use in general, a particular concentration of drug use amongst student-athletes and the heightened danger of injury when student-athletes use drugs, has shown a special interest in protecting the minors under their care.

•

•

In Dunn v. White, an inmate refused to submit to mandatory AIDS testing. He claimed a Fourth Amendment violation of his rights due to lack of probable cause and lack of a warrant o Since the testing was done for the administrative purposes of placement and care of inmates, the test was reasonable and did not require probable cause or a warrant In Grover v. Eastern Nebraska Community Office of Retardation, the agency required its employees to submit to AIDS and hepatitis testing o The stated position of the agency was to prevent the spread of disease to disabled citizens, however, ▪ The court found that in most cases that there was no threat of transmittal to disabled citizens and only in some limited circumstances such as when patients bit or scratched was there even minimal threat of transmittal

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▪

There was no evidence of sexual abuse of the patients justifying additional protections o The testing was therefore deemed invalid 7.2(c) Closely Regulated Businesses • Closely regulated businesses may be inspected without first obtaining a warrant o A lower expectation of privacy is found due to the amount of regulation o Closely regulated businesses are also perceived to be subject to special governmental interests due to heightened safety and public policy concerns in the particular industry • Warrantless searches are considered valid when: o The government can show a substantial interest; and’ o The warrantless search furthers the government’s substantial interest; and, o The statutory scheme that substitutes for the warrant procedure is reasonable Donovan v. Dewey 452 U.S. 594 (1981) Facts: The Federal Mine Safety and Health Act authorized that federal mine inspectors were to inspect underground mines at least four times per year and surface mine twice per year. Furthermore, inspectors are directed to make follow-up inspections when a previous inspection had uncovered violations to check for compliance. Inspectors were granted a right of entry without prior notice and without the requirement of a warrant. If a mine operator is denied entry, they may institute a civil action to obtain injunctive relief. A federal mine inspector attempted to inspect quarries owned by the appellee to determine whether 25 violations had been addressed. Prior to the completion of the inspection, the inspector was barred from the mine and told not to return unless armed with a search warrant.

Issue: Is a warrantless inspection of underground or surface mines a search violative of the Fourth Amendment?

Decision: No. Although the inspection is characterized as a search, the fact that mining is a closely regulated industry permits a warrantless search. The government has shown a substantial interest in the mining industry, has evidenced that warrantless searches further the government’s interest in the industry and that the statutory scheme substituting for the warrant procedure is reasonable. Mine owners knew that regular inspections would occur; knew that re-inspections would occur and since the government inspected all mines, there was no application of discretion to question.

7.2(c) Subpoenas • Subpoenas are orders that require a person to testify or require a person or company to produce specified documents • Agencies do not have an inherent power to issue subpoenas o Congress must expressly delegate subpoena power in the agency’s enabling statute • In federal court proceedings, court clerks often sign and issue blank subpoenas for the use of requesting parties o The requesting party need not show materiality or relevance to obtain a subpoena 67

•

7.3

The APA does not confer upon agencies the power to issue subpoenas but does provide that subpoenas may be issued subject to authorization by another statute o Subpoenas in agency proceedings may only be issued upon request of a party showing general relevance and reasonable scope of the evidence sought • Organizations who ignore an agency’s subpoena o Agencies may enforce their subpoenas in court but requesting a court order for compliance • Failure to comply with the court order results in contempt of court which is then punishable by the courts • A nondisclosing party has the right to raise objections to an agency subpoena o Objections may be raised on any issue except for jurisdiction • Jurisdiction is determined by the agency at the subpoena stage and courts will not entertain objections based on lack of jurisdiction • Administrative subpoenas for information are subject to Fourth Amendment requirements o Issuance must be reasonable and probable cause is not required 7.2(d) Parallel Proceedings • Civil and administrative laws often overlap with criminal laws • Parallel proceedings do not violate constitutional requirements o Courts may require the suspension of administrative proceedings while a criminal proceeding is held due to the differing discovery rules ▪ Discovery is broader in civil proceedings and the information gained could inappropriately affect a criminal proceeding PAPERWORK REDUCTION ACT • Enacted in 1980 • Goals include: o Minimization of paperwork for individuals, businesses and the federal government o Minimizing the cost to the federal government regarding the collection, maintenance and dissemination of information o Maximization of the usefulness of information collected o Uniformity of federal law regarding the collection and dissemination of information o Reduction of fraud and waste o Assurance of the preservation of privacy and confidentiality, including adherence to Privacy Act requirements • The Office of Information and Regulatory Affairs (OIRA) was established within the Office of Management and Budget to regulate the Act • The OMB is delegated the duty of monitoring federal compliance with the Privacy Act o All requests for the collection of information by administrative agencies must be approved by the OMB ▪ A congressionally mandated ten elements are applied to each request for new reporting requirements • The OMB has reported that the Paperwork Reduction Act has been successful 68

7.4

o The total paperwork burden has been reduced o Hours committed to the satisfaction of information demands has been reduced CONCLUSION

LIST OF CHANGES/TRANSITION GUIDE The title of the chapter has been revised from “Agency Information Collections and Investigations” from the sixth edition to the new chapter title of “Agency Investigations and Information Collection” in the seventh edition. The City of Los Angeles v. Patel case starting on page 212 is new for the seventh edition. Some of the sections in the outline have been revised.

The section on subpoenas, previously in two sections, is combined for the seventh edition.

ADDITIONAL ASSIGNMENTS AND CLASS ACTIVITIES For a possible assignment, consider dividing the class in two groups to argue a motion to quash subpoenas. Half the class could argue in support of the subpoena and the other half of the class could argue against the subpoena. Consider using the case Lerman v. U.S. S.E.C., 928 F.Supp.2d 798 (S.D.N.Y. 2013) where the Securities and Exchange Commission (SEC) subpoenaed bank for records of customer accounts in connection with SEC investigation of broker-dealers' alleged misappropriation of investors' funds as a case study. Bank customers moved to quash subpoenas under Right to Financial Privacy Act (RFPA). Student groups could draft trial court briefs and present oral arguments on the motion to quash.

SUGGESTED ANSWERS TO END-OF-CHAPTER ASSIGNMENTS Review Questions 1.

An agency has the power and right to require disclosure of records when: • The agency has jurisdiction over the subject matter and individual concerned; and • The requirement is reasonable and not overly burdensome; and • The information required is not considered privileged

2.

Derivative use immunity will bar the government from using the information obtained during the testimony from being used to prosecute the witness; however, prosecution based on information independently obtained is permitted. Transactional immunity is considered complete immunity and absolutely prohibits the government from prosecuting the witness, regardless of how additional information is obtained.

3.

Fourth Amendment protections apply to administrative searches when those searches have a criminal component. If the search is deemed purely administrative, the Fourth Amendment requirements are relaxed allowing that reasonable cause rather than probable cause be shown. Warrantless searches may be authorized when closely regulated businesses are involved and individual privacy rights may be preempted when a special governmental interest designed to protect the public can be shown.

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4.

Warrantless inspections are permitted regarding closely regulated businesses when: • The government can show a substantial interest; and, • The warrantless inspection furthers the government’s substantial interest; and, • The statutory scheme that substitutes for the warrant procedure is shown to be reasonable

5.

A subpoena, also known as a summons, is an order directing a person to appear to testify and/or directing a person or organization to produce specifically identified documents.

6.

The courts have relaxed Fourth Amendment requirements regarding agency inspections based on their determinations that: • administrative searches generally are not performed for the purpose of obtaining evidence of criminal activity • today’s complex society requires that broad authority be granted to administrative agencies to operate, particularly regarding the monitoring of social issues and policies • business organizations have a lower expectation of privacy than do individuals

Critical Thinking and Application Problems 1.

Student answers will vary. Students could address such issues as expectation of privacy, intended use of information obtained and the protection of the general public.

2.

Student answers will vary. Students could address such issues as separation of powers and delegation of authority.

3.

Yes, a drug test of nuclear power plant employees would be considered a search. Neverthe-less, employees of a nuclear power plant with access to protected areas of the plant may be subject to warrantless searches or searches without first establishing probable cause. Nuclear power plants are closely regulated businesses that fall under exceptions permitting warrantless searches and the courts have determined that the expectation of privacy for employees of closely regulated businesses is diminished. Furthermore, the harm resulting to the public from a nuclear accident is high so the government has a compelling interest in their regulation. It may be argued that the rights of employees without access to protected areas may be higher than their counterparts.

4.

Regarding the airline pilot: The pilot’s rights to privacy are preempted by the government’s rights and duties to assure the safety of the general public. A pilot who is drunk or otherwise intoxicated poses a severe threat to the public, so the special interests of the government will permit constitutionally valid warrantless searches.

Regarding the telephone reservations employees: Since there is no direct threat to public safety, the employee’s rights to privacy require that a properly obtained warrant based on probable cause be issued.

5.

Regarding the drivers: The testing scheme is constitutionally sound. The government has, and has proven, a legitimate interest in protecting the public. This scheme furthers

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the government’s interest. Steps are provided to allow for safe and private testing.

Infringement on privacy is minimal and due process is afforded the driver.

Regarding the non-drivers: This section is unconstitutional. The government has not shown a compelling interest proving that the non-drivers pose a risk to the public that the government needs to regulate.

Regarding the HIV/AIDS testing of drivers: This section is unconstitutional. The government has not shown a compelling interest proving that the drivers pose a risk to the public based solely on HIV/AIDS status. Therefore, there is no compelling governmental interest to regulate in this area.

Note: The issues raised in this question closely parallel those issues raised in Skinner v.

Railway Labor Executive Ass’n

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Chapter 8 Formal Adjudications CHAPTER OVERVIEW Chapter 8 focuses on agency adjudications. An adjudication is a proceeding to determine if an individual or person has violated a regulation or statute. It is an adjudication when an agency considers issuing, suspending, or revoking a permit or license. Most government employees are entitled to adjudicatory procedures when suspended or fired from government employment. Due process requires notice and a hearing for most adjudications. The types of discovery used in adjudications include interrogatories, depositions, requests for production of documents, requests for admissions, a bill of particulars, and subpoenas. The establishment of a system of administrative law judges, with statutory independence from their agencies, has done much for the integrity of agency decision making. Regardless, concerns that ALJs continue to favor agencies over citizens persist.

CHAPTER OBJECTIVES After completing this chapter, the student should be able to • Define and distinguish adjudications from rulemaking under the federal APA. • Explain when an adjudication is required under the APA, and apply these rules to a set of facts.

• Understand what is required for notice and a hearing to be adequate under the APA, to satisfy due process, and applicable case law.

• Distinguish formal from informal adjudications, including the process differences and when each is required.

• Explain and support with applicable caselaw what qualifies a person or entity to be a party in interest.

• Identify and explain the various forms of discovery used in adjudications.

• Explain how administrative law judges are appointed, the efforts that have been made to ensure their independence, and how the law addresses bias concerns.

• Brief a judicial opinion with little outside assistance. You should be successful in identifying the relevant facts. You should also be successful in identifying the legal issue and analyzing the court’s rationale in at least 50 percent of your briefs.

LECTURE OUTLINE 8.1

IN GENERAL • The APA provides that all proceedings resulting in an order are adjudications o Orders are any actions other than rulemaking • A proceeding to determine if an individual or person has violated a regulation or statute is an adjudication o Most governmental employees are entitled to an adjudicatory proceeding if suspended or fired from their job 72

8.2

NOTICE • Adjudications are the administrative equivalent of court trials o Administrative procedures are more relaxed o Administrative procedures may vary from case to case o The proceeding is adversarial so evidence, cross-examination and arguments do occur • Proper notice of a hearing must be provided o The APA mandates that: ▪ Parties be “timely informed” • No specific time must be set • Adequate time to prepare one’s case is the standard • Many statutes set a minimum notice period ▪ Legal authority and jurisdiction must be supplied o Notice may be by first class mail although personal service is preferred and is considered best • Agencies may introduce new issues at a hearing if reasonable o If unreasonable, a continuance is issued to allow time to prepare ▪ Technical defects (i.e. - misspelled names) will not invalidate a notice

8.3

PARTIES AND PARTICIPATION • Who may participate • Who is entitled to notice 8.3(a) Parties in Interest and Intervention • The APA refers to parties in interest but doesn’t define the term o Courts have concluded that parties in interest includes: ▪ Named parties to the proceeding ▪ Those subject to the agency action • A claimant for benefits • A licensee • An applicant for services • Intervention is a process whereby an interested nonparty may apply to become a named party o Consumer advocacy groups often intervene on behalf of the public • The laws determining parties in interest parallel laws determining judicial standing • In Office of Communications v. FCC, a renewal of a television station’s license without a hearing was at issue. Groups representing the viewing audience were denied permission to intervene because the FCC determined that the public was not a party in interest. The Circuit Court of Appeals reversed the FCC ruling and stated that the public need not suffer economic loss to be a party in interest.

Ashbacker Radio Corp. v. Federal Communications Commission 326 U.S. 327 (1946) 73

Facts: Fetzer Broadcasting Company filed an application with the FCC to, among other things, operate at 1230kc. While the Fetzer application was pending, Ashbacker filed an application to change the operating frequency of one of its stations to 1230kc. The FCC determined that two stations operating at the same frequency would create intolerable interference and further stated that the applications were mutually exclusive. The Fetzer application was then granted without a hearing and the Ashbacker application was designated for a hearing. Ashbacker filed a petition for a hearing, rehearing and other related relief.

Issue: Has the FCC acted fairly and procedurally correctly but granting one application without a hearing and then postponing a decision on a similar application pending a hearing?

Decision: No, they have not acted properly. Although the commission has the power to grant applications without a hearing, “where two bona fide applications are mutually exclusive, the grant of one without a hearing to both deprives the loser of the opportunity which the Congress has chosen to give him…” Granting the Fetzer application placed an unfair burden on Ashbacker placing them in the same position as a newcomer trying to displace an established party. The FCC’s actions were fundamentally unfair and unsound procedurally.

Note: This case established what is known as the Ashbacker Doctrine mandating that an agency have one consolidated comparative hearing when two or more parties are competing for one license.

8.3(b) Other Methods of Participation • Being called as a witness • Filing an amicus curie brief o Friend of the court brief in which a nonparty files a brief expressing a particular opinion or point of view hoping to convince decision makers to adopt their position o Amicus curie briefs are frequently filed in appellate court proceeding and may occur in administrative proceedings • Participating in a class action suit o The class representative litigates on behalf of the class o Class members must have similar interests in the suit o Class members may actively or passively participate 8.4

DISCOVERY • Pretrial exchange of information o Prevents trial by surprise o Allows for realistic case evaluations o Facilitates settlements • FRCP allows for discovery of anything “reasonably calculated to lead to the discovery of admissible evidence” o Exceptions include: ▪ Discovery that is unreasonably burdensome ▪ Privileged information • The APA does not mention discovery 74

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o Agencies are not required to provide information prior to a hearing o The U.S. Constitution does not require pre hearing discovery on administrative proceedings Many agencies never-the-less have adopted discovery rules There are six primary tools of discovery: o Interrogatories are written question presented to a party that are answered in writing under oath o Depositions consist of oral testimony given under oath to parties and/or witnesses o Requests for production of documents require a party to produce documents specified by the requesting party o Requests for admissions are requests made in writing to a party asking the party to admit the truth of a statement, deny the statement or express an objection to the statement o A bill of particulars is a request for a more detailed or definite statement explaining or supplementing a pleading or complaint o Subpoenas are used to require production of documents in the possession of nonparties The Jencks Act requires that those prosecuting cases to disclose prior statements of government witnesses after those witnesses have testified The Federal Freedom of Information Act permits citizens access to public documents and information Stipulations are agreements between the parties that a particular fact is true o Saves time during hearings o Binds the parties during the hearing

8.5

PREHEARING CONFERENCE • The APA authorizes the use of prehearing conferences o To settle certain issues o To simplify issues • Prehearing conferences are excellent sources of discovery due to the information exchanged • Presiding official will discuss procedure and format of the hearing

8.6

PREHEARING SETTLEMENT AND ALTERNATIVE DISPUTE RESOLUTION • Settlement may occur at any time during a case • The APA requires that agencies entertain settlement offers if time, the nature of the hearing and public interest permits • Agencies are encouraged to use Alternative Dispute Resolution (ADR) whenever possible o ADR is faster and cheaper than a formal hearing

NOTE: THIS CHAPTER IS ONLY CONCERNED WITH TRIAL TYPE EVIDENTIARY HEARINGS 75

8.7

THE HEARING • Trial procedures are only required if specified by statute o Statute must be specific • Never-the-less, due process is required • Presided over by an administrative law judge or other officer • Parties make an opening and closing statement • Evidence is presented • Witnesses may be examined and cross-examined • Objections may be made 8.7(a) Evidence Admissibility • Courts of law have specific Federal Rules of Evidence o Aim is exclude untrustworthy, irrelevant or unduly prejudicial evidence o Hearsay is prohibited (subject to exceptions) ▪ Out of court statements attributed to a litigant • The Federal Rules of Evidence do not apply in administrative hearings • The APA allows for any oral or written evidence to be admitted subject to rules created by the agency to exclude irrelevant, immaterial or unduly repetitious evidence o Agencies are therefore not bound by common law or statutory rules ▪ Hearsay may be admitted subject to approval by the presiding official • Prejudicial Error Rule o An error is prejudicial if it affects the outcome of the case. Harmless errors are not reversible • Legal Residuum Rule o Agency decisions may be made in large part on evidence not admissible in court but may not be made entirely on such evidence. A minimum residuum of competent evidence must support the agency’s decision • Privileged and Illegal Evidence o Privileges were created at common law to protect privacy o Privileges include communications between: ▪ Husband and wife ▪ Attorney and client ▪ Physician and patient o The APA does not deal with the issue of privileged communications ▪ Well established privileges are however recognized in most administrative proceedings

Immigration & Naturalization Service v. Lopez-Mendoza, 468 U.S. 1032 (1984) Facts: The current hearing is a deportation hearing regarding the defendant who is a citizen of Mexico. The defendant is illegally in the United States. During an unlawful arrest, he admitted his unlawful presence in the country and asks that that information be excluded from this hearing.

Issue: Does the exclusionary rule apply in this case, making his admission inadmissible?

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Decision: No. A deportation hearing is purely a civil administrative action to determine eligibility to stay in the country. There is no guilt determined or punishment assessed so the exclusionary rule does not add significantly to the defendant’s Fourth Amendment rights. Furthermore, evidence obtained independent of the arrest may still be used to effect deportation. Applying the exclusionary rule in deportation proceedings would create an unacceptable burden on the deportation system that is designed to be streamlined and swift. This protects the public interest in upholding the law. o Official Notice ▪ Judicial notice occurs when a judge presumes a fact to be true • Negates the requirement that the fact be proved • Usually involves facts obvious to an average person • Parties may request that a court take judicial notice of a fact; or, • The judge may do so sua sponte; under his or her own initiative ▪ The presiding officer at an administrative hearing may take official notice of a fact • Broader than judicial notice o Facts obvious to an average person; and, o Facts obvious only to experts in the field o Does not include: ▪ Expectations ▪ Predictions ▪ Strong beliefs • Parties have the opportunity to disprove material facts admitted by official notice • Notice may be taken before, during or after a hearing o If during, parties must be given an opportunity to evaluate and respond o If after, a rehearing may be required upon objection • Official notice infringes on due process rights so it must be used judiciously 8.7(b) Burdens • Burden refers to the obligation of a party to prove a case o Burden of production concerns who has the obligation to produce evidence or raise an issue o Burden of persuasion refers to the task of convincing the trier of fact that your position is meritorious ▪ The party that has the burden of production also carries the burden of persuasion ▪ This is usually the moving party ▪ Exception – Social Security cases • Claimant has burden of production • Burden then shifts to the agency to prove ineligibility 8.7(c) Standards 77

•

Standard are the level or degree by which a case must be proven o Civil trials require a ‘preponderance of the evidence’ o Criminal trials require ‘beyond a reasonable doubt’ o If Congress has not specified the applicable burden in the enabling statute, courts have frequently imposed a middle standard called ‘clear and convincing’

See Figure 8-3 Steadman v. United States 450 U. S. 91 (1981) Facts: The Securities and Exchange Commission, pursuant to their enabling statute applies a preponderance of the evidence standard in determining anti-fraud provisions of the law. The petitioner, during a disciplinary hearing, challenged the commission’s use of the preponderance of the evidence standard urging an application of a clear and convincing standard.

Issue: Where the Congress has expressly stated the standard to be applied in an administrative proceeding, should the court disregard the clear Congressional mandate and impose an alternate standard?

Decision: No. Although the court can and often does prescribe the appropriate standard to which an agency should apply, the court must be mindful of Congressional mandates and not effect changes unless an injustice would occur.

Woodby v. Immigration & Naturalization Service 385 U.S. 276 (1966) Facts: Petitioners have urged the court to consider whether a preponderance of the evidence standard is appropriate in a deportation hearing. They ask that the court mandate that a clear and convincing standard be applied. Congress has provided no direction in the enabling statute regarding the evidentiary standard that should be applied.

Issues: 1. Where there is no Congressional mandate regarding evidentiary standards, should the court step in to create such a mandate? 2. Does the court have the right or authority to establish a standard in a civil case that exceeds preponderance of the evidence requirements?

Decision: 1. Yes. Where Congress has not spoken to the standard of proof issue, traditionally the question has fallen to the courts for determination. 2. Yes. Although a deportation hearing is civil in nature, the results of the hearing have a profound effect on the parties involved. Being banished from this country is a severe depravation and it is unrealistic to decide the outcome of the hearing on the same standard used in a mere negligence case. Denaturalization and expatriation cases have been required by the court to impose the clear and convincing standard. No less a burden should be applied in deportation cases.

8.7(d) Administrative Law Judges • The right to a hearing does not impart the right to have the agency head participate as ‘judge’ • Often cases are heard by one official and decided by another • Agency heads frequently delegate the duty of conducting a hearing to subordinate agency officials; including: 78

• •

•

o Administrative hearing officers o Hearing examiners o Referees o Presiding officers o Administrative law judges Today, the person presiding over the hearing is most frequently called an Administrative law judge (ALJ) The APA empowers ALJs to: o Administer oaths and affirmations o Issue subpoenas authorized by law o Rule on evidence o Take or cause depositions o Control the hearing o Hold settlement and prehearing conferences o Make or recommend decisions o Take other actions authorized by the agency consistent with the APA Independence o The hallmark of the judicial branch o ALJs are not however Article III judges ▪ Not entitled to protections afforded federal judges in the Constitution ▪ Congress has provided for “quasi independence” • ALJs are assigned to cases in rotation o Agencies can’t appoint sympathetic judges • ALJs may be removed for good cause only o Defeats retribution for unpopular decisions • Salaries are set by the Civil Service Commission, not by the agency • ALJs are selected from a list of qualified candidates by the Office of Personnel Management o Shields against agency retribution

Interest, Bias and Prejudgment o Fair hearings require neutral ALJs o Three issues must be addressed to ensure fairness and neutrality ▪ Interest – The ALJ cannot have a financial stake in the hearing ▪ In Tumey v. Ohio, the mayor of a town was empowered to hear and decide traffic cases. He was also authorized by the law to share in traffic fine proceeds. The arrangement was found unconstitutional due to his financial interest in the decisions he alone made.

▪ Bias – ALJs who exhibit a personal bias are required to recuse themselves ▪ Prejudgment – ALJs that have formed an established belief as to the outcome of the case prior to the hearing must recuse themselves

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Gibson v. Berryhill 411 U.S. 564 (1973) Facts: The State of Alabama had, and then repealed a law permitting businesses to maintain offices where “eyes were examined or glasses fitted” as long as the office was under the charge of a licensed optometrist. The Alabama Optometry Association, a professional organization whose membership is limited to independent optometrists not employed by others filed charges with Alabama Board of Optometry against optometrists in the employ of Lee Optical Co. The Board subsequently filed their own charges. The Associations case was postponed while the Boards case proceeded. After the state court rendered judgment for the Board, the Associations case was reinstituted. The individual optometrists countered with a complaint against the Board and the Association alleging bias.

Issue: Was the Board biased due to procedural steps taken and due to improper interest due to the Boards membership?

Decision: Yes. The Board filed a complaint in state court that was similar to proceeding already before them for which notice of hearings had been issued. This shows the formation of a prejudgment opinion. The fact that the Board membership was composed solely of optometrists in the private practice of optometry, the success of the Board’s actions had a direct financial effect on the members. o Previous contact with a case is not automatic grounds for recusal ▪ Prior investigatory contact may however require disqualification • In American Cyanide Co. v. FTC, an appeal of an agency decision was filed with the FTC and the chairman of the commission who would have presided over the appeal had previously worked as chief counsel to the Senate subcommittee that investigated the same issues raised in the appeal. His refusal to recuse himself was found to be improper by the reviewing court. o The rule of necessity allows a judge who should disqualify him or herself to remain on a case should no other qualified individual be available ▪ In United States v. Will, the issue involved a federal judge pay issue. Even though all federal judges had an interest in the case, there was no one capable of making a decision if all federal judges disqualified themselves. The court declared that it could hear the case by ‘necessity’ • Separation and Combination of Functions o Combination of functions – Concept that many agencies perform the functions of all three branches of government ▪ Courts have not yet demanded a separation of functions ▪ Congress has required a separation of functions in the APA • Prosecutorial and adjudicative functions are separated through the independence of ALJs • Agency officials input may occur through participation as a witness or counsel • Restriction applies to accusatory or adversarial proceedings • Restriction does not apply to: o Initial licensing 80

o Ratemaking o Rulemaking ▪ Ex parte contact with anyone, including agency officials, is prohibited ▪ Separation rule do not apply to agency heads who may investigate, prosecute and decide 8.7(e) Counsel and Attorney Fees Generally, parties have the right to legal representation at administrative adjudications o Based on Due Process, not Sixth Amendment which deals only with criminal proceedings o Agencies may, by rule, permit non-attorneys to represent parties ▪ i.e. – Proceedings before the Social Security Administration o Each party must pay for their own attorney (the “American Rule”) ▪ APA amendment allows a prevailing party to petition for the government to pay their fees • Governments defense is that the agency’s position was substantially justified ▪ Amendment protects small business from overzealous agencies 8.7(f) The Decision • Rendered after parties have had the opportunity to submit proposed findings and conclusions • Institutional Decision o Agency decision maker is the governing body of the agency o Decision makers did not always hear the cases to the agency ▪ Led to claims of rubberstamping subordinates decisions ▪ APA remedied problem by requiring ALJs to hear cases when agency heads did not • Following the hearing, the parties may submit proposed findings and conclusions to the agency • Final, Initial and Recommended Decisions o When agency heads preside over a hearing, the agency head may render a final decision (like a judge following a trial) o When an ALJ presides over a hearing, they issue an initial or recommended decision ▪ Initial decisions become final if not appealed • Used for well settled issues • On appeal, deference is not given to ALJ’s decision • Agency performs a de novo review ▪ Recommended decisions must be certified and transmitted to the agency for action • Used for new or novel issues ▪ Unless required by the agency, ALJs issue initial decisions • Findings in Formal Adjudications o The APA requires that all decision be made part of the record o The APA requires a written decision supported by findings and conclusions 81

o Findings and conclusions must be rendered on all material facts o Reasons and bases for decisions must be specified o Requiring reasoned opinions provides for: ▪ Accountability of administrators ▪ Decisional process is improved due to required analysis ▪ Educates the public about agency related matters ▪ Provides precedent ▪ Allows for meaningful judicial review • Findings in Informal Adjudications o There are no findings requirements regarding informal adjudications • The Right to a Jury in Administrative Proceedings o Seventh Amendment requires juries for common law actions but not for equitable actions ▪ Right extends to codified statutory actions o The right to a jury applies to adjudications of private rights but not to public rights ▪ Actions against the government are public actions ▪ Congress cannot turn a private right into a public right solely by assigning its adjudication to an agency 8.7(g) Observing an Administrative Hearing • Book describes a personal or class activity 8.8

LICENSE CASES • APA specifies procedure o No formal adjudication is required o Proceeding must occur within a reasonable period of time o Licensee must be given written notice of facts or conduct supporting potential adverse decisions before the decision is rendered ▪ Exception – Written prior notice is not required if public safety, public health or public interest is at risk o If licensee makes a timely request for the continuation of a license, if the hearing or decision is not made in a timely manner before the license expires, the license automatically continues until the decision is rendered

8.9

CONCLUSION

LIST OF CHANGES/TRANSITION GUIDE The seventh edition has removed the following objective: Identify the different forms of decisions made in adjudications and the circumstances in which each form is issued. The following objective has been added to the seventh edition: Explain and support with applicable caselaw what qualifies a person or entity to be a party in interest. The sidebar on page 242 on the total number of ALJs has been updated. On page 245, reference to the case Lucia v. SEC (2018) on the constitutionality of the appointment of the ALJs with the Securities and Exchange Commission (SEC) has been added.

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ADDITIONAL ASSIGNMENTS AND CLASS ACTIVITIES For a possible assignment, have students imagine they are working as a legal assistant or paralegal for a lawyer who has 15 years of experience practicing claims and appeals of Social Security claims. The supervising attorney is interested in becoming an Administrative Law Judge and asks the paralegal to research the requirements and application process to become an Administrative Law Judge (ALJ) with the U.S. Social Security Administration. The attorney also wants to know the compensation and benefits for ALJs with the SSA. The paralegal should present the information to the lawyer in a memorandum.

SUGGESTED ANSWERS TO END-OF-CHAPTER ASSIGNMENTS Review Questions 1.

According to the APA, an adjudication is any proceeding that results in an order. Orders are any actions, including licensing, that are not rulemaking.

2.

The APA requires that parties be timely informed of the time, place and nature of the hearing. Parties must also be informed of the legal authority and jurisdiction under which the hearing is to be held as well as the matters of law to be asserted.

3.

Amicus curiae literally translates to “friend of the court”. An amicus curiae brief is a brief filed by an interested party in which they express a perspective or opinion to the court.

4.

Intervention is a process in which an interested non-party to a case may become a party.

5.

Discovery is a pretrial exchange of information designed to prevent trial by surprise, allow for realistic case evaluations and to facilitate settlements. There are six primary tools of discovery: • Interrogatories are written question presented to a party that are answered in writing under oath • Depositions consist of oral testimony given under oath to parties and/or witnesses • Requests for production of documents require a party to produce documents specified by the requesting party • Requests for admissions are requests made in writing to a party asking the party to admit the truth of a statement, deny the statement or express an objection to the statement • A bill of particulars is a request for a more detailed or definite statement explaining or supplementing a pleading or complaint • Subpoenas are used to require production of documents in the possession of nonparties

6.

A trial type hearing is specifically required when Congress clearly states that the right to a trial type hearing is granted through statute. The Due Process Clause may also require

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that an evidentiary hearing be conducted in certain instances even though not specifically required by statute.

7.

Burden of proof refers to the obligation of a party to prove a case. There are two types of burdens: • The burden of production concerns who has the obligation to produce evidence or raise an issue.

• The burden of persuasion refers to the task of convincing the trier of fact that your position is meritorious. The party that has the burden of production also carries the burden of persuasion.

8.

Congress has provided for “quasi independence” by: • Assigning ALJs to cases in rotation so agencies can’t appoint sympathetic judges; • Providing that ALJs may be removed only for good cause, which defeats retribution for unpopular decisions; • Setting ALJ salaries by the Civil Service Commission, rather than the agency; • Selecting ALJs from a list of qualified candidates by the Office of Personnel Management, which shields ALJs against agency retribution

9.

Agency requirements regarding decisions in formal adjudications include: • The APA requires that all decision be made part of the record • The APA requires a written decision supported by findings and conclusions • Findings and conclusions must be rendered on all material facts • Reasons and bases for decisions must be specified There are no findings requirements regarding informal adjudications.

10.

The rule of necessity allows a judge to hear a case they would otherwise be required to recuse themselves from, when there are no other qualified or otherwise appropriate judges available to hear the case.

Critical Thinking and Applications Problems 1.

a. The notice was inadequate. Although the timeliness of the notice was reasonable, necessary notice regarding the actual legal matter at issue was omitted, denying her the opportunity to properly prepare for the hearing. b. Because this was an evidentiary hearing and the notice failed to specify the legal issues and was therefore faulty, it would have been appropriate to grant a recess to summon her witnesses or a continuance to prepare and present relevant evidence. c. Under the APA, a written decision is required specifying all findings and conclusions as well as the reasons and bases for decisions. The oral decision is inadequate and improper.

2.

Student answers will vary. In their answers, students should address Due Process and Equal Protection Constitutional requirements.

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3.

The suspension or revocation of a license amounts to a taking under the law. This deprivation of interests has Constitutional ramifications and consequences. If a person has made an appropriate license renewal application and the decision by the appropriate agency is delayed or otherwise not timely, the suspension or revocation of the license without a hearing or even benefit of a written decision is violative of Due Process. The APA addresses this issue by requiring that licenses be automatically continued until a decision is rendered, this preventing an unjust taking and thereby preserving Due Process rights.

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Chapter 9 Accountability through Liability CHAPTER OVERVIEW Chapter 9 focuses on accountability through liability with an emphasis on judicial review. Most review authority comes from statutes. Other authority comes from the Constitution and the common law. Decisions “committed to agency discretion” are not subject to judicial review.

The Constitution limits federal jurisdiction to “cases or controversies” creating issues relating to standing and ripeness. The standing doctrine requires that the person bringing the suit have a personal interest in the case. All administrative remedies must be pursued and completed before judicial review may take place. Three most common standards of review are de novo, substantial evidence, and the arbitrary and capricious standard.

CHAPTER OBJECTIVES After completing this chapter, the student should be able to • List, define, contrast, and apply to a fact scenario the common law and statutory sources of review authority.

• List, define, and apply to a fact scenario the most significant timing and common law limitations upon review authority.

• Apply the timing of review doctrines, primary jurisdiction, mootness, and ripeness to fact scenarios.

• Determine, from a fact scenario, whether an individual, corporation, or other entity has standing to be heard.

• Identify and apply the appropriate standard of review to fact scenarios.

• Brief a judicial opinion with little outside assistance. You should be successful in identifying the relevant facts. You should also be successful in identifying the legal issue and analyzing the court’s rationale in at least 50 percent of your briefs.

LECTURE OUTLINE 9.1

IN GENERAL • This chapter discusses judicial control of agencies • Two types of judicial review o Review of agency action o Claims for damages • Two essential questions o Does a court have authority to review a particular agency action? If so, o What is the scope of the review?

9.2

SOURCES OF REVIEW AUTHORITY • Most review authority comes from statutes • Other authority comes from the Constitution and the common law 86

9.2(a) Statutory • If a statute provides for review, no other method may be used • Time limits for review may be provided by Congress o 60 and 90 days are common o 30 day limitation has been upheld in one instance o Courts will strictly enforce Congressional time limits ▪ Untimely suits are almost always dismissed • Congress may set the location for review • Both time and location requirements must meet due process or will fail • Congress may also explicitly preclude review, however, o Courts are reluctant to read statutes as such o In Johnson v. Robinson, the court strongly implied that Congress may not preclude review of constitutional issues o In Webster v. Doe, the court again strongly implied that Congress may not preclude review of constitutional issues when suit was brought after the CIA terminated an employee for being homosexual • Congress may establish review criteria regarding constitutional issues regarding o Time o Location o Manner • Federal question review is available whenever a Constitutional provision or a federal law is in question • The APA provides for review whenever a party is aggrieved o The courts have not interpreted this to create an independent basis for judicial review • The APA requires that the form of the lawsuit be as prescribed by statute 9.2(b) Nonstatutory • If a statute does not address review, review is not precluded • Common law writs include: o Certiorari ▪ No longer available in federal system • Replaced by: o Injunction o Declaratory judgments ▪ May still be used in many state systems o Prohibition ▪ No longer used in the federal administrative system ▪ May still be used in many state systems o Mandamus ▪ May only be used to compel an act required by law ▪ Cannot compel a discretionary act o Habeas corpus ▪ Still available • Review varies from state to state 87

9.3

AGENCY DISCRETION • Decisions “committed to agency discretion” are not subject to judicial review o Specifically exempted by the APA o Suits filed that challenge agency discretion are dismissed due to lack of authority to hear the case ▪ In Webster v. Doe, (mentioned above) the firing, pursuant to authority vested in the director by statute, of a homosexual CIA employee was deemed nonreviewable because the alleged national security issue was considered by the courts as committed to the agencies discretion • Nonreview of decisions involving discretion is not absolute o Abuses of discretion may be reviewed Lincoln v. Virgil, 508 U.S. 182 (1993) Facts: The Indian Health Service provides health care for approximately 1.5 million American Indian and Alaska Native people. The Service receives time to time appropriations of lump sum expenditures and is authorized to provide for the[Indian’s] “relief of distress and conservation of health” . The Indian Children‘s Program was established and various centers were opened to provide such children ‘intensive care in a residential setting.”… Congress never specifically appropriated funds for these centers.

Eventually the purpose of the program was re-evaluated and the determination was made to discontinue the direct clinical services to children in the Southwest. Suit was brought by eligible children who were challenging the decision to close the centers.

Issue: Is the Service’s determination to close the program reviewable under the APA? Decision: No. The allocations of funds from a lump sum appropriation are administrative decisions traditionally regarded as committed to agency discretion. Such an allocation clearly shows intent by Congress not to dictate or limit agency decision making regarding the use of the funds. Should an agency abuse their discretion or act illegally or otherwise wrongly, review would be appropriate, but this is not the case here.

Heckler v. Chaney, 470 U.S. 821 (1985) Facts: Prison inmates subject to the death penalty brought suit against the FDA challenging the use if certain drugs for lethal injections. The inmates claimed that the drugs had not been tested for the intended use, would not bring about the painless and speedy death projected and were inadequately labeled. They further claimed that the use of the drugs for executions required the approval of “new drugs” by the FDA since they were being used for a new purpose. The FDA responded and refused to take any of the requested actions.

Issues: Is the agency’s refusal to take action reviewable? Can the court rule on a claim of abuse of discretion under these circumstances?

Decision: No as to both issues. For an agency’s action to be reviewable there must be a standard in place to measure the agency’s discretion against. In this case the statute creates no such standard. With no set standard, the court must consider any decisionmaking as committed to the agency’s discretion and therefore nonreviewable. The court

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is also unable to determine the existence of an agency’s abuse of discretion where no standard is available to judge against.

9.4

STANDING • The Constitution limits federal jurisdiction to “cases or controversies” o Theoretical and hypothetical disputes may not be heard • Where a statute is silent as to who may petition for review, standing principles apply o The standing doctrine requires that the person bringing the suit have a personal interest in the case ▪ A legally protected interest ▪ A right being violated • Where a statute narrowly limits the group eligible to seek review, the statute applies • Traditionally, financial and personal injury issues alone were not sufficient to create standing o This inflexibility proved problematic Association of Data Processing Organizations v. Camp, 397 U.S. 150 (1970) Facts: Petitioners sell data processing services to businesses. The Comptroller of the Currency made a ruling saying that national banks may make data processing services available to other banks and bank customers. The Association has brought suit challenging that ruling.

Issue: Does the Association have standing to bring this law suit?

Decision: Yes. The court differentiated between legal interests and the question of standing which asks whether the interest sought to be protected falls within the zone of interests to be protected or regulated by the statute or constitutional guarantee in question.” They also recognized that the APA grants standing to a person “aggrieved by agency action within the meaning of a relevant statute.” They determined that financial injury falls within the APA definition of standing.

•

This case creates a new test that looks at three criteria: o The plaintiff must suffer an injury in fact o The interests asserted must be within the zone of interests to be protected or regulated by the statute or constitutional guarantee in question o It must be likely that the injury will be resolved favorably • Now, economic and noneconomic injury may sufficiently establish standing 9.4(a) Citizen and Taxpayer • Citizenship alone does not create the right to challenge public expenditures in most situations • Status as a taxpayer alone does not create the right to challenge public expenditures in most situations o In Flast v. Cohen, an exception was created allowing a lawsuit challenging the establishment of nonreligious academic courses in religious schools. The court found standing for a taxpayer when a

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nexus could be shown between an expenditure and a statute exceeding constitutional limitations. o Valley Forge Christian College v. Americans for Separation of Church and State, Inc., limited Flast when it decided that taxpayer standing was precluded when the case revolves around a decision by an agency rather than an expenditure by Congress.

Taxpayers have standing only when the challenge involves an expenditure that violates a constitutional limitation Voting status alone does not create the right to challenge public expenditures in most situations o Standing will exist if the voter can show an agency interference with voting rights

Federal Election Commission v. Akins, 524 U.S. 11 (1998) Facts: The Federal Election Commission (FEC) has the duty of remedying any actual or perceived corruption of the political process in a variety of ways. One such way is the limits imposed on those organizations deemed to be political committees. Political committees are limited in terms of monetary amounts that committees are required to maintain extensive records of member names and addresses, amounts and purposes of disbursements, contributions received and other information. The FEC ruled that the American Israel Public Affairs Committee (AIPAC) was not a political committee and was therefore exempt from their reporting requirements. The respondents are a group that frequently opposes the AIPAC and brought suit to persuade the FEC to reclassify the AIPAC as a political committee. Claims were made that the AIPAC had made contributions in excess of the allowed amount and that fact should automatically trigger political committee status. The FEC added a political purpose requirement to their consideration and rejected the petitioner’s claim. The FEC also claimed that the courts were not empowered to adjudicate this suit because respondents had not shown an injury in fact which would create a case or controversy actionable by the courts.

Issue: Do the respondents have proper standing to bring this suit?

Decision: Yes. The court determined that the evidence showed that there was a high likelihood that the AIPAC could be reevaluated and determined to be a political committee. Therefore the respondents were likely denied sufficient information regarding their ability to obtain AIPAC donor lists, information pertaining to campaign related contributions and other statutorily required information. There was also a finding that the FEC would have made their decision contrary to evidence so an abuse of agency discretion could possibly exist. The court found the dismissal unlawful and remanded the case back to the FEC. 9.4(b) Qui Tam Actions • Congress may authorize private individuals to act as private attorney generals and bring suit on behalf of the United States o The attorney general may intervene and over the case from the private citizen (called an informer) o These private attorney generals (informers) are entitled to keep a portion of any law suit proceeds 90

▪

If the AG intervenes the informer is entitled to 15 to 25% of the proceeds ▪ If the informer prosecutes the case they are entitled to 25 to 30 % of the proceeds 9.4(c) Environmental Cases • Noneconomic injury can often be found in environmental cases • The implication is that an individual member of the organization must show evidence of injury, to establish standing for and on behalf of the organization • In Lujan v. Defenders of Wildlife, the ESA was interpreted to only apply to endangered species only in the United States and on the high seas. The plaintiff brought suit and produced affidavits of two members who asserted that they were abroad and contemplated returning at some time in the future and had an interest in viewing endangered species upon their return. The court found the plaintiffs to have no standing because the unplanned and unknown date of return was too conjectural and hypothetical. o Had a scientist studying the species been a named plaintiff, standing would have been found o The concurring opinion opined that had return ticket been produced for the plaintiffs, standing would have been found Sierra Club v. Morton, 405 U.S. (1972) Facts: The Mineral King Valley, located in California, is a secluded and undeveloped area of natural beauty used primarily for recreational purposes. The United States Forrest Service decided to allow the area to undergo recreational development as a ski resort, publishing a prospectus and inviting bids for the development. Disney won the bidding and after surveying and planning for three years, proposed a complex of motels, restaurants, swimming pools, parking lots and other structures accommodating up to 14,000 visitors a day. The Sierra Club, dedicated to the protection of the ecology and environment, brought suit to stop the development.

Issue: Is the Sierra Club’s “special interest in the problem” sufficient to show a sufficient stake in the case, establishing standing?

Decision: No. While the Sierra Club’s interest was laudable, to exhibit a sufficient stake in the case requires a showing that they were aggrieved and injured. Merely showing an interest does not rise to the level of showing injury supporting standing.

9.4(d) Competitor • The APA authorizes standing for interested parties, not just obvious parties o Thus competitors may often be afforded standing 9.4(e) Consumer • Standing can be found regarding: o Pricing o Reduction of quality 9.4(f) Statutory 91

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Congress has some discretion to create rights that will confer standing Massachusetts v. EPA, 549 U.S. 497 (2007): several states were found to have standing to challenge the EPA’s decision not to regulate automobile emissions 9.4(g) Constitutional • Constitution may create a right that will confer standing • Common in criminal cases • Standing to raise the Tenth Amendment issue 9.5

TIMING OF REVIEW • The APA provides for review of final agency actions 9.5(a) Primary Jurisdiction • Primary jurisdiction occurs when a private party sues another private party regarding a matter under an agency’s control o Courts refer the matter to the agency for an initial decision o Applied only in closely regulated businesses o Fact issues are referred but not issues of law • Lack of agency level remedy is immaterial to referral o In Lichten v. Eastern Air Lines the plaintiff sued for damages related to lost jewelry. Despite their inability to award damages, the issue was referred to the Civil Aeronautics Board for review.

The net effect was that the plaintiffs had to go through two separate proceedings. o The Lichten rule is a general one not followed in many states and eroding at the federal level 9.5(b) Exhaustion of Administrative Remedies • All administrative remedies must be pursued and completed before judicial review may take place • Interlocutory appeals from trial courts are rarely permitted • Purposes for exhaustion of remedies requirement: o It allows the agency to correct mistakes o Preserves agency autonomy and independence o Promotes judicial economy by providing a complete record o Promotes judicial economy by allowing the agency to make initial findings o Cooperation among agencies and parties is enhanced 9.5(c) Ripeness • Deals with whether the case is mature enough for trial • At common law a party had two choices regarding a questionable rule: o Comply with the rule and then seek review o Fail to comply and suffer penalties and then seek review • Today, pre-enforcement review will be permitted o In Abbott Laboratories v. Gardner, Abbott challenged a rule requiring labeling information. The FDA claimed that the case was not ripe because the rule had not yet been enforced. The court 92

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found the case to be ripe because the issues were purely legal and because significant harm could come to Abbott if the rule were enforced.

Three issues are scrutinized to determine ripeness: o Are the issues fit for review? o Have any administrative remedies been exhausted? o Will there be significant harm if pre-enforcement review is not conducted?

Woodford v. NGO, 548 U.S. 81 (2006) Facts: The U.S. Prison Litigation Reform Act requires that prisoners in state and federal correctional institutions exhaust their administrative remedies before they seek federal civil rights remedies. California has a system to hear grievances that requires the first complaint to be filed within 15 days of an incident.

Issue: If a prisoner fails to file in the fifteen days and is barred from a remedy in the state system, has he or she exhausted state remedies?

Decision: No. The PLRA was intended to bring prison litigation under control by reducing the number of suits and by improving the quality of the cases that federal courts review. Exhaustion was intended to do both. A prisoner who does not timely avail himself of state remedies has not exhausted them under PLRA and accordingly, may not have the claims heard at the federal level.

McKart v. United States, 395 U.S. 185 (1969) Facts: Petitioner was indicted for failing to report for and submit to induction into the armed forces of the United States. Petitioner claimed an exemption from service because he was the sole surviving son of a family whose father had been killed in action while serving. Petitioner had properly registered but failed to report to his ordered preinduction physical and then failed to report when ordered to report for induction.

Because the petitioner had never filed a claim for this exemption, the government asserted that his failure to appeal his 1-A classification constituted a failure to exhaust his administrative remedies prior to judicial review.

Issues: Should the exhaustion of remedies doctrine apply in all criminal cases? Would the suspension of the exhaustion of remedies doctrine in this case serve to hinder or harm the Selective Service System?

Decision: No as to both issues. The exhaustion of remedies doctrine is not applicable in all criminal cases. Applying the doctrine can be exceedingly harsh. The defendant is prosecuted without judicial protections and oversight. Only when the government can show an interest that clearly outweighs the burdens on the defendant should the courts consider applying the doctrine. In this case the defense asserted is solely one of statutory interpretation. There is no agency expertise or exercise of discretion required to reach a conclusion. The Selective Service System was merely denied the opportunity to render their interpretation of the statute. This interpretation was not one that would have significantly aided the court in its decision-making.

9.6

SCOPE AND STANDARDS OF REVIEW • How far a court will delve into the agency’s fact finding 93

• Two sides to scope of review o Review prevents abuses o Judges must defer to agency expertise ▪ Degree to which a court defers to agency expertise is called standard of review • Three most common standards of review o De novo o Substantial evidence o Arbitrary and capricious 9.6(a) Standard One: De Novo • No deference is given to agency findings • Reviewing court may substitute its judgment for the agency’s o Pure de novo – A new hearing with new testimony and evidence o Record de novo - permits a court to substitute its judgment for the agency’s based solely on a review of the record • Record de novo is the most common de novo review 9.6(b) Standard Two: Substantial Evidence • Reviewing court examines facts and conclusions of agency • Court may not substitute its judgment • Reviewing court affirms agency decision of supported by substantial evidence • Used for review of formal rulemaking and decisions from a formal adjudication 9.6(c) Standard Three: Arbitrary, Capricious, Abuse of Discretion • Affords significant deference to agency decisions • Agency decisions are presumed valid and is affirmed if rational o Clear error is required to overturn an agency decision • Applies to all informal agency actions Federal Communications Commission v. Fox, 556 U.S. 502 (2009) Facts: Federal statute of 1934 forbids the broadcast of indecent language. The responsibility for rulemaking and enforcement of this law was delegated to the Federal Communications Commission (FCC). The FCC has defined indecency more broadly than the Court’s definition of obscenity. Because of the special nature of broadcasting and licensing, the Court had previously affirmed the FCC’s definition, which included a time element to increase the protection of children. Historically, the FCC treated multiple uses of indecent words, uttered in their literal sense, were actionable. In 2004, the FCC decided that single use and nonliteral uses can be actionable. The FCC’s rationale for the change was, in part, that improvements in technology made it easier for broadcasters to censure indecent speech. This case resulted from two utterances of the F-word on Fox, one by Cher and another by Nicole Richie, while presenting at the Golden Globes by Paris Hilton. The FCC sanctioned Fox, which challenged the new rule as arbitrary and capricious.

Decision: The rule is reasonable because technology has improved and ven nonliteral, single utterances of the F-word can be harmful to children.

Massachusetts v. EPA, 549 U.S 497 (2007) 94

Facts: Several states and others sued the EPA for its decision not to regulate vehicle emissions in an effort to slow global warming under the Clean Air Act. Issue: Was the EPA’s decision to not issue a rule regulating vehicle emissions arbitrary and capricious?

Decision: Yes. Congress intended for the EPA to act in some manner, as evinced by a serious of statutes. The EPA’s reasons for not regulating are not related to global warming and are not reasonable. Even more, while the president enjoys considerable discretion over foreign affairs, that authority does not extend to failure to enforce domestic laws. The Court did not issue an order to make rules instead, it simply ordered the agency to make a reasoned judgment on the matter. The EPA cannot avoid its statutory obligation by noting that there is uncertainty in the scientific community on the question.

9.6(d) Issues of Law • Legal issues are separated from factual and judgmental issues on review • Courts often give some deference to agency decisions particularly when the agency’s expertise is used to reach the decision o If Congress has specifically addressed an issue in the statute, a de novo review is conducted ▪ Known as a Chevron Step One determination o If Congress has not addressed the issue, the court will reverse the agency only if the decision was unreasonable ▪ Known as a Chevron Step Two determination 9.6(e) Issues of Fact • Treated differently than law issues o Three standards ▪ De novo – Applied only when required by law ▪ Substantial evidence – Used to review formal rulemaking and adjudication decisions ▪ Arbitrary, capricious, abuse of discretion - Used to review informal rulemaking and adjudication decisions 9.6(f) Mixed Questions of Law and Fact • Called mixed questions • There is no uniform standard applied 9.6(g) Issues of Discretion • In most cases discretionary decisions are subject to the arbitrary, capricious, abuse of discretion standard o Decisions committed to agency discretion are not reviewable See Table 9-1 for a summary of standards and their appropriate application 9.6(h) Failure to Raise Issues • Review is generally limited to issues raised at the administrative level o Issues regarding agency jurisdiction may be raised at any time 9.6(i) Alternative Rationale

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In Securities & Exchange Commission v. Chenery, the court ruled that review must be limited to an agency’s rational and courts are not permitted to seek or use alternative rational in arriving at a decision o This forces an agency to render complete and thoughtful decisions

9.7

REVIEW OF RULES • Formal rules are reviewed under the substantial evidence standard • Informal rules are reviewed under the arbitrary, capricious, abuse of discretion standard • Interpretive rules are reviewed under the de novo standard

9.8

COMMON LAW DOCTRINES • Four common law doctrines are utilized by reviewing courts: o Res judicata o Collateral estoppel o Equitable estoppel o Laches 9.8(a) Res Judicata • a/k/a - claim preclusion • Precludes a party from relitigating a final judgment on the merits issued by a competent court o Parties must be identical o Claims must be identical • Does not apply to: o Different facts o Appeals o Reconsiderations o Rehearings o Executive functions o Legislative functions • Prevents an entire action if it is identical to one previously heard 9.8(b) Collateral Estoppel • a/k/a – Issue preclusion • Prevents the relitigation of an issue previously decided in a prior case o Parties must be identical o Issues must be identical ▪ Party must have had the opportunity to address the issue in the prior proceeding • Prevents relitigation of issues but does not preclude entire case • Application of collateral estoppel varies from agency to agency 9.8(c) Application to the Government • Two recognized exceptions to res judicata and collateral estoppel o Jointly known as: Nonmutual Offensive Collateral Estoppel ▪ Identity of parties is not required (nonmutual collateral estoppel) ▪ Plantiffs may now offensively plead collateral estoppel 96

o In United States v. Mendoza, the court ruled that nonmutual offensive collateral estoppel was applicable toprivate individuals but not to the government 9.8(d) Equitable Estoppel • Prevents the assertion of certain claims or issues because it would be unfair to the opposing party • In Federal Crop Insurance Corp. v. Merrill, a farmer was told by the government that his crops were insured. After they were destroyed, his claim was denied. The government asserted that a publication put him on notice that his crops were not eligible and the court agreed that the farmer had not been treated unfairly.

• In Moser v. United States, the advice of a government agent was found to be binding. For thirty years the no-estoppel against the government rule was relaxed.

• In Office of Personnel Management v. Richmond, the court said that equitable estoppel could never be applied so that a claim or benefit contrary to what Congress authorized is awarded.

Schweiker v. Hansen, 450 U.S. 785 (1981) Facts: Respondent met with a field representative of the Social Security Administration.

A question was put to the representative who gave the petitioner erroneous information.

Petitioner then left without filing a written application. The Act requires a written application to be eligible for benefits. Proper procedure required the field agent to notify the petitioner that a written application was required but the agent did not so inform her.

Issue: Did the field agents erroneous advice and failure to notify petitioner of her need to file a written petition constitute a defense of equitable estoppel when the government asserted her failure to file the written petition as cause to deny her benefits?

Decision: No. The court found the errors by the field agent to be minor and not sufficient to estop the government from insisting upon compliance with the regulation.

The court cited the fact that if every deviation from official procedures could be asserted, the government would be put at unnecessary risk.

9.8(e) Laches • Requires that an issue be raised in a timely manner o Three requirements ▪ Party must have been aware that the claim could have been raised ▪ Delay in raising the claim must be unreasonable ▪ Delay must result in prejudice to opposing party • May apply even if statutory deadlines are not violated 9.9

CONCLUSION

LIST OF CHANGES/TRANSITION GUIDE

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The statement by Supreme Court Associate Justice Neil Gorsuch on page 306 about the Chevron has been added to the seventh edition. The seventh edition also adds the following new objective: Apply the timing of review doctrines, primary jurisdiction, mootness, and ripeness to fact scenarios. The review question on discovery has been removed in the seventh edition. Section 9.4(f) on statutory standing and Section 9.4(g) on constitutional standing have been added.

ADDITIONAL ASSIGNMENTS AND CLASS ACTIVITIES For a possible in-class class activity, consider having a class discussion on the U.S. Supreme Court case Clapper v. Amnesty International USA in section 9.4 on standing. Students could write a case brief of the case. Students could also take a position on whether they agree with the court's opinion or the dissenting opinion and explain their position. The merits of the case involving the 2008 amendments to the Foreign Intelligence Surveillance Act (FISA), which expanded the ability of the National Security Agency (NSA) to monitor international communications by U.S. citizens, could also be debated by the class. Consider also having a class debate about whether judges on the U.S. Foreign Intelligence Surveillance Court should require separate nomination by the President and confirmation by the Senate rather than appointment directly by the Chief Justice of the Supreme Court for any federal district judge.

SUGGESTED ANSWERS TO END-OF-CHAPTER ASSIGNMENTS Review Questions 1.

The four common law writs available for review are: • Certiorari: A writ issued by a superior court to an inferior court requiring the inferior court to produce a record or file for review by the superior court.

• Mandamus: A writ issued by a superior court to an inferior court or individual requiring that some action be taken. This normally applies to ministerial acts.

• Habeas Corpus: A writ issued to the custodian of a person ordering that the person be brought before the court to determine the lawfulness of their imprisonment.

• Prohibition: A writ issued by a superior court to an inferior court or individual requiring that some action not be taken.

2.

Standing addresses the issue of who may sue. A party has standing if they: • Have suffered an injury in fact • Are asserting an interest within the zone of interests protected or regulated by statute or a constitutional guarantee is in question • Can show a likelihood that their injury will be redressed by a favorable decision

3.

A qui tam action is a suit filed by an individual against another individual on behalf of the government where the party against whom the action is brought is guilty of defrauding the government.

4.

The doctrine of exhaustion of administrative remedies requires that an agency render a final decision on all available relevant remedies before judicial review takes place. The primary jurisdiction doctrine requires that a court refer a case to the appropriate 98

administrative agency for initial review when the issues raised in the suit are in the agency’s jurisdiction.

5.

All legal issues are subject to de novo review. Factual issues may be subject to de novo review, substantial evidence review or arbitrary, capricious, abuse of discretion review.

6.

Res judicata prevents a final decision of a competent court or administrative agency from being relitigated or reviewed. Collateral estoppel prevents an issue already litigated and decided from being relitigated. Equitable estoppel prevents a party from raising an issue or defense because it is unfair to the opposing party to do so.

7.

Federal question jurisdiction refers to federal court jurisdiction to hear matters asserted due to a claim arising under the Constitution or a federal law.

Critical Thinking and Applications Problems 1.

Kevin’s status as a taxpayer does not afford him standing to bring this suit. His financial interest in this matter is not a direct injury in fact, nor can he show that the expenditure violates constitutional principles.

2.

TransShipping will have standing because the tax creates for them an economic injury in fact. Furthermore, they are operating within the zone of interests regulated by the new legislation. Shipping Union does not directly deal within the zone of interests regulated by the new legislation. They are suffering no present injury so their suit is speculative and addresses injuries that may or may not ever occur. To have standing, they would have needed to produce at minimum one member with a present injury in fact.

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Chapter 10 Accountability through Accessibility CHAPTER OVERVIEW Chapter 10 focuses on agency accountability through accessibility. This chapter examines the public’s rights to obtain information from the government and to observe its operations. The discussion begins with the Freedom of Information Act (FOIA), the primary tool for obtaining information from the United States. Ironically, a discussion of the rights of the public would be incomplete without a discussion of the Privacy Act, a law that prevents governmental disclosure of information in special circumstances. Finally, the chapter closes with an examination of the Government in the Sunshine Act and related laws.

CHAPTER OBJECTIVES After completing this chapter, the student should be able to • Describe the basic architecture of the Freedom of Information Act (FOIA), including the three modalities of providing public access to information, listing and describing the major exceptions to the FOIA, and the process for enforcing FOIA rights.

• Describe the basic architecture of the Privacy Act, including the circumstances in which it prohibits or limits public access to information, and apply what you have learned to a fact scenario.

• Compare and contrast the objectives of the FOIA and Privacy Acts, including an explanation of how the two interact; apply what you have learned to a fact scenario.

• Describe the basic architecture of the Government in the Sunshine Act, applying its mandates to a fact scenario.

• Explain how courts determine if the FOIA and other sunshine laws apply to private organizations that provide services for the U.S. government.

• Brief a judicial opinion with little outside assistance. You should be successful in identifying the relevant facts. You should also be successful in identifying the legal issue and analyzing the court’s rationale in at least 75 percent of your briefs.

LECTURE OUTLINE 10.1

INTRODUCTION • This chapter examines the public’s right to obtain information from the government and to observe government operations

10.2

FREEDOM OF INFORMATION ACT • The Freedom of Information Act (FOIA) is part of the APA section of the U.S. Code • Purpose is to ensure an informed citizenry • Figure 10-1 summarizes the FOIA • Three forms of disclosure are provided for: 100

o Publication o Inspection and copying o Production upon request 10.2(a) Publication Requirement • Every agency must publish in the Federal Register: o A description of its central field organizations and from whom and how the public can obtain information o A statement of the general course and methods of how functions are channeled and the agency requirements pertaining to formal and informal procedures o Rules and descriptions of forms available to the public, where to get the forms and the scope of the forms o Substantive rules and regulations of general applicability including statements of policy and interpretations of law o All amendments, revisions or repeals of any of the above • Personnel and internal administrative matters need not be published • Failure to Publish o Unpublished procedural rules may not be asserted to the detriment of an adverse party • Actual and timely notice will allow unpublished rules to be asserted 10.2(b) Inspection and Copying Requirement • The following must be made available for inspection and copying o All orders and final opinions including concurring and dissenting opinions during adjudication o Unpublished statements of policy and interpretation adopted by the agency o Administrative staff manuals and instructions that impact the public • The reading room requirement is satisfied by providing the public a place to review and copy documents o Indexing o A current index of all materials that are required to be available or published must be maintained and available for public inspection • The index must be published in the Federal Register at least quarterly • Failure to Comply o Information not made available may not be used against a party • Actual and timely notice will allow unpublished index information to be used 10.2(c) Production Upon Request Requirement • A request for information not included in either publication or inspection and copying requirements o Two requirements • Request must be reasonable 101

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Request must comply with agency time, place and fee requirements • Request Procedure o Available to citizens and noncitizens • Request must reasonably describe the information desired • Must permit location of record without unreasonable effort by agency o Agency has 10 business days to determine if they will comply with request • Requestor must be notified o If request is denied and appealed, agency must decide within 20 days of appeal o If appeal is denied requestor must be notified of option of judicial review o Unusual circumstances will allow an extension of the statutory time limits • Documents are in offices separate from the office where the request is being processed • The agency must search a large number of separate and distinct records • The agency must consult with another agency that has a substantial interest in the request • What Records? o Disclosure applies to records in the possession or control of the agency • Confidential or exempted information may be redacted 10.2(d) FOIA as Discovery • Whether the FOIA may be used as discovery is not settled in all courts North v. Walsh, 881 F. 2d 1088 (D.C. Cir. 1989) Facts: During a grand jury investigation of the Iran/Contra matter, North alleged the unconstitutionality of the independent counsel provision of the Ethics in Government Act. A civil trial subpoena was filed by North requesting the production of sixteen categories of documents. While the summary judgment on the subpoena was pending, North was indicted. The judge interpreted the FOIA exemption 7(A) pertaining to law enforcement records as a blanket exemption covering all of the information sought by North. It was reasoned that the criminal discovery mechanisms would be hindered and distorted were the information released.

Issue: Does the procurement of records through the FOIA that would not otherwise be available in normal criminal discovery distort or interfere with the law enforcement process?

Decision: No. The fact that the records would not otherwise be available in normal criminal discovery does not automatically evidence interference with the law enforcement process. The government must show that disclosure would in some particular and discernable way, disrupt, impede or otherwise harm the law enforcement 102

proceeding. The government must show this harm by more than a mere conclusory statement. The required particular and discernable evidence has not been shown.

10.2(e) Fees and Waivers • The FOIA allows agencies to assess fees for request responses o Commercial requesters – search, copying and review expenses o Educational, noncommercial scientific or news requesters – only copying expenses o All other requesters – search and copying expenses • Except for commercial requests, there is no fee for: o First two hours of search time o First 100 pages of copying • Fees may be reduced or waived if the request is likely to contribute significantly to the public understanding of the government 10.2(f) Exemptions • The FOIA contains nine exclusive exceptions • The exemptions are permissive (information may be disclosed at the discretion of the agency) • The FOIA does not require agencies to protect privacy (see Privacy Act at 10.3) • National Defense and Foreign Policy o Requires a presidential executive order to apply ▪ President need not review specific document ▪ Order need only refer to type of documents to be exempted • Critical Infrastructures o New post 9/11/01 exemption o Applies to: ▪ Communications ▪ Banking ▪ Health care ▪ Utilities • Agency Personnel Matters o Agency personnel rules and practices including: ▪ Vacation leave ▪ Lunch breaks • Other Statutes o Other statutes that authorize withholding records are incorporated into the FOIA by reference ▪ Other statute must permit no discretion • Trade Secrets and Financial Information o Privileged and confidential information and trade secrets obtained from a person o There is no express FOIA provision for third party intervention although many courts have recognized this right • Agency Memoranda o Inter-agency and intra-agency memos and letters 103

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o Predetermination deliberation information is exempted o Factual or legal information is not exempted Personnel, Medical and Files Containing Private Information o Files that would constitute a clearly unwarranted invasion of privacy ▪ Right of public to obtain government information must be weighed against privacy interest of individual

United States Department of Defense v. Federal Labor Relations Authority, 510 U.S. 487 (1994) Facts: Two local unions requested the names and home addresses of the agency employees in the bargaining unit representing the employees. The agency supplied the employee’s names but refused to supply home addresses. The unions filed unfair labor practice charges.

Issue: Would the disclosure of employee home addresses constitute a clearly unwarranted invasion of privacy under the exemption regarding personnel, medical and files containing private information?

Decision: Yes. The public’s interest in supporting disclosure is at most negligible.

Although the address information may be otherwise available, that alone does not authorize disclosure. The addresses are considered records covered under the Privacy Act and may only be disclosed if required to be disclosed under the FOIA. The right of the employee not to be disturbed at home by work related matters is far more significant than the public’s right to the information. The court was “reluctant to disparage the privacy of the home” citing the Constitution, laws and traditions •

Law Enforcement Records o May be withheld if disclosure would: ▪ Interfere with enforcement proceedings ▪ Impede a right to a fair trial or impartial proceeding ▪ constitute an unwarranted invasion of privacy ▪ disclose the identity of a confidential source ▪ disclose investigative techniques and procedures ▪ endanger the life or physical safety of law enforcement personnel

National Archives & Records Administration v. Favish, 541 U.S. 157 (2004) Facts: Vincent Foster, Jr. was a deputy counsel to President Clinton. He was found dead and the police investigation concluded that Foster had committed suicide. During the investigation, photos were taken of Mr. Foster’s body. Five other independent investigations arrived at the same conclusion. Favish, a private citizen, requested copies of the photos under the FOIA. The agency in control of the photos refused to provide the copies claiming them to be “records or information compiled for law enforcement purposes” that “could reasonably be expected to constitute an unwarranted invasion of personal privacy.” Favish asserted that the privacy issue applied to the deceased only and did not extend to the family.

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Issue: Are privacy rights limited to control of information only about oneself or do the rights also extend to family members?

Decision: Privacy rights do extend to family members. While the family is not in the same position as the individual who is subject to the disclosure, the court found that the family did have significant rights to direct and control disposition of the body of the deceased based on case law, common law and traditions. Furthermore, due to the notoriety of the case, the family was subjected to intense scrutiny and harassment. They were deluged by requests for information from those wishing to exploit the matter for personal profit. Family members testified that releasing the photographs would constitute a painful unwarranted invasion of privacy on numerous family members. Favish has not produced any evidence showing that the interest of the public in this case was significant or that the government acted improperly in withholding the requested information.

Balancing the family’s privacy interests against the public interest in disclosure, the court concluded that in this case, disclosure was an unwarranted invasion of privacy.

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Financial Institution Information o It is argued that disclosure might result in unnecessarily decreasing public confidence in financial institutions or even a possible panic • Geological Information o Geological and geophysical information, and data, including maps, concerning wells 10.2(g) Judicial Review and Remedies • The FOIA specifically provides for judicial review • Civil actions to enforce disclosure rights must be brought in federal district court o Where the complainant resides o Where the complainant maintains its principle place of business o Where the documents are located o In the District of Columbia • Review is de novo • In camera review of records are permitted o Preserves confidentiality • Documents are presumed available o Burden of proving exemption falls on agency ▪ Requires more than a mere claim o Courts may order agencies to disclose documents ▪ Failure to comply is contempt • Attorney fees and costs may be awarded (not a universal rule) • The FOIA does not create a private right of action for damages o Injunctive relief is the primary remedy available 10.2(h)Congressional Monitoring • All agencies must submit a yearly report to the Speaker of the House and the President of the Senate who refer the reports to appropriate committees • Reports must include: 105

o o o o o

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10.3

Number of refused requests for information Reasons for the refusals Number of appeals of refusals Results of appeals Results of disciplinary proceedings against agency employees for FOIA noncompliance o Copies of any rules promulgated regarding the FOIA o Copy of the agency’s fee schedule o Total fees collected The Attorney General must also provide a report including: o Number of cases arising under the FOIA o Exemptions involved in each case o Disposition of each case o Costs, fees or penalties imposed o Explanation of FOIA compliance efforts

PRIVACY ACT • Purpose is to withhold sensitive documents from public disclosure • Privacy Act is found in the APA under “Records maintained in individuals” • Protects privacy of records compiled on individuals but not other government records o Records are any item, collection or grouping of information about an individual that is maintained by an agency including: ▪ Education ▪ Financial transactions ▪ Medical history ▪ Criminal history ▪ Employment history o Record must identify the individual in some way • See Figure 10.4 for a summary of Privacy Act provisions 10.3(a) Collection of Information • Agencies are not prohibited from gathering information about individuals o Agencies are limited to maintaining a system of records necessary to accomplish the purposes of the agency pursuant to statute or presidential executive order o The term individuals has not been interpreted to include businesses • Information should be collected directly from the individual whenever possible o Individual must be informed ▪ Of the agency’s authority ▪ Whether the disclosure is voluntary or involuntary ▪ Purpose for which the information will be used ▪ Routine uses of the information ▪ Consequences of noncompliance 10.3(b)Maintaining Records, Publication and Review 106

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To promote fairness to the individual, agencies must monitor the information’s o Accuracy o Relevance o Timeliness o Completeness • Records of how an individual exercises their First Amendment rights may not be maintained unless a part of a law enforcement activity • Agencies must make reasonable efforts to notify individuals when information about them is being made available under a compulsory legal process • Each agency must set rules for dealing with information and train employees in these rules • Safeguards must be established to protect against security threats to compiled information 10.3(c) Disclosure of Records • No records may be disclosed unless: o The individual consents; or, o One of twelve exceptions applies ▪ Information needed by agency officials to perform their job ▪ When disclosure is required by the FOIA ▪ Information routinely used ▪ Information provided to the census bureau ▪ Statistics and reporting when individuals are not identified ▪ Information provided to the National Archives ▪ Compelling health and safety information ▪ Information provided to Congress or a Congressional committee ▪ Information provided to the Comptroller General ▪ Information compelled by court order • A record of each disclosure must be maintained o Kept for five years or for the life of the record (whichever is longer) 10.3(d)Relationship of FOIA and Privacy Act • See page 280 for an extensive comparison of positive and negative values regarding disclosure (publicity) and nondisclosure (privacy) pursuant to legal scholar Dean Spader • The FOIA almost always applies to requests for information o Applies to government reports and data • The Privacy Act applies in much fewer cases o Only applies to individuals • When information requested constitutes a record, both the Privacy Act and the FOIA will apply o If the FOIA requires disclosure ▪ The Privacy Act will not apply and the information is disclosed 107

o If the FOIA permits nondisclosure and requester is a member of the public ▪ The Privacy Act prohibits disclosure unless an exemption applies o If the FOIA permits nondisclosure and requester is the subject of the record ▪ The Privacy Act requires disclosure unless an exemption applies 10.3(e) Individual Access • Individuals must be given access to their own records o Individual may include another person of their choosing to review records with them • See Figure 10-5 for an example of a Privacy Act Request form 10.3(f) Amending Records • Individuals may request amendment of records containing inaccurate, irrelevant, untimely or incomplete information • Agency must make correction within ten days or notify applicant of reason for denial • If appealed, a final decision must be promptly made o Deadline may be extended up to 30 days for good cause o If denied, judicial review is available 10.3(g) Judicial Review and Remedies • The Privacy Act contains civil and criminal penalties • Civil Actions o Available if: • Request for amendment of record is denied • Individual is not permitted access to own records • Agency fails to maintain records with required accuracy, relevance, timeliness or completeness and a decision adverse to the individual is made • Agency otherwise fails to comply with the Privacy Act such that the individual is adversely affected o Judicial review is de novo o In camera review is available at court’s discretion o Attorney fees and court costs may be awarded Ray v. Turner, 587 F.2d 1187 (D.C. Cir. 1978) Facts: Plaintiffs sent letters to the CIA requesting “a copy of any file you have on me”.

The CIA did not have files on the plaintiffs but their names were mentioned in documents in the possession of the CIA. The CIA initially refused to release the documents and after all administrative appeals had been exhausted, did release portions of the documents. The CIA moved for a summary judgment and the plaintiffs sought an in camera inspection of the documents. The in camera inspection request was denied by the district court saying that such inspection was seldom, if ever, necessary or appropriate.

Issue: How and when should in camera inspection requests be granted?

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Decision: In camera inspection requests should not be summarily dismissed or taken lightly. When a judge is not confident in their ability to render a proper de novo judgment without an in camera inspection, he may proceed in camera without worry.

Congress left the issue of when such inspections should be performed at the discretion of the judge without indication of the extent of their proper use. In camera inspections being at the discretion of the judge should be utilized whenever the judge feels it to be appropriate.

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Criminal Penalties o There are two criminal provisions that apply to the government ▪ If a government employee discloses a record they know should be withheld • Misdemeanor • Fine up to $5,000 ▪ If a government employee willfully maintains a record without satisfying notice requirements • Misdemeanor • Fine up to $5,000 o There is one criminal provision that applies to individuals ▪ If a person knowingly and willfully requests or obtains a record concerning an individual under false pretences • Misdemeanor • Fine up to $5,000 10.3(h)Congressional Monitoring • Two requirements o Notice must be given to Congress and the Office of Management and Budget regarding any proposed changes to the establishment or alteration of any system of records o The president must submit an annual report to the Speaker of the House and the President of the Senate regarding all agency systems of records ▪ Report must include explanations of exemptions 10.3(i) Other Privacy Laws • Health Insurance and Portability and Accountability Act of 1996 (HIPAA) protects personal health information • Federal Educational Rights and Privacy Act (FERPA) protects the educational records of students in schools and universities 10.4

GOVERNMENT IN THE SUNSHINE ACT • Openness of government is fundamental to democracy • Sunshine Act requires agency meeting to be open to public observance o Applies only to agencies headed by more than one person ▪ Called collegial agencies o Agencies headed by one person are not required to comply with the act 10.4(a) Exemptions • No open meetings are required if the discussion will include: 109

o Matters of national defense or foreign policy identified in an executive order o Matters related solely to internal agency personnel rules and practices o Matters exempted from disclosure by other statute o Trade secrets or commercial or financial information of an individual o Accusations of crimes or formal censures o Matters of a personal nature that would constitute an unwarranted invasion of personal privacy o Investigatory records compiled for law enforcement purposes o Matters concerning regulation or supervision of financial institutions o Information that will endanger the stability of a financial institution or lead to significant speculation in currencies, securities or commodities o Matters concerning an agency’s issuance of subpoenas, participation in civil proceedings, actions in foreign actions, arbitration and other agency actions • Meetings are presumed open and may only be closed due to an exemption • If a separate statute requires an open meeting, the meeting may not be closed • Audio records or transcripts of all meetings must be maintained of all closed meetings o Two years or one year after the conclusion of the agency proceeding whichever is longer 10.4(b) Judicial Review and Remedies • Review is in federal district court o Where the meeting was held o Where the agency has its headquarters o In the District of Columbia • Remedies available include: o Declaratory judgment o Injunctive relief o Other relief expressly available • In camera inspection is authorized • There is no right to ex post facto relief, only for current existing violations • Attorney fees and cost may be awarded • Plaintiffs may be liable for attorney fees and costs if the action is deemed frivolous 10.4(c) Congressional Monitoring • Agencies must report annually to Congress o Number of closed meetings o Reasons for closed meetings o Litigation related to closure of meetings 10.5(d) Federal Advisory Committee Act 110

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Advisory committees are not deemed agencies Advisory committees do not o Enforce laws o Make rules o Conduct investigations for violations of law o Adjudicate cases Purpose is solely to provide agencies with advice Advisory committees are created when needed and disbanded when its work is completed Notice of meetings are published in the Federal Register o Meetings are open to the public with few exceptions o Interested persons must be permitted to appear and make statements o Detailed minutes are maintained

10.5(e) Trade Secrets Act • Prohibits disclosure of trade secrets and related information by government employees o Unless disclosure is required by statute o Penalties include ▪ Up to one year imprisonment ▪ Fine ▪ Termination of employment 10.5

PRIVATIZATION AND THE PUBLIC’S RIGHT TO KNOW • FOIA is unclear regarding its application to non-governmental employees doing work for the government • Forsham v. Harris and other subsequent cases have set out criteria to determine when a private party is subject to government regulation o Extent to which the government manages the daily operation of the agency o Extent to which the government regulates the agency o Extent to which the government funds the agency o The amount of authority delegated by the government to the agency o Whether the agency is performing a core government function particularly if related to civil liberties Forsham v. Harris, 445 U.S. 169 (1980) Facts: The University Group Diabetes Program (UGDP) was formed by a group of private physicians to study diabetes. The study generated over 55 million records documenting over 1000 patients. The study was funded entirely by federal grants and the funding agency exercised a certain amount of supervision over the activities. The Committee on the Care of the Diabetic (CCD) was critical of the UGDP study and requested copies of the raw data compiled by UGDP to analyze.

Issues: Was the UGDP an agency? Is the UGDP obligated to disclose information they have compiled?

Decision: No as to both issues. Legislative history indicates without question that private organizations receiving federal financial assistance are not within the definition of 111

agency. Congress had the opportunity to declare that records compiled by UGDP be made available for disclosure but did not do so. Therefore, the court concluded that the data sought was not agency records within the definition of the FOIA nor was the UGDP a federal agency under the FOIA. 10.6

CONCLUSION

LIST OF CHANGES/TRANSITION GUIDE The seventh edition adds the following objective: Explain how courts determine if the FOIA and other sunshine laws apply to private organizations that provide services for the U.S. government.

Information about the FOIA Improvement Act of 2016 has also been added. The Critical Thinking Questions at the end of the chapter have also been revised. Section 10.3(i) on Other Privacy Laws discussing HIPAA and FERPA has also been added.

ADDITIONAL ASSIGNMENTS AND CLASS ACTIVITIES For an additional assignment, have students submit a mock FOIA request or e-FOIA request.

Students could also draft a letter requesting appeal of a denial for a FOIA request. For a possible topic, consider having students draft a FOIA request to the Federal Bureau of Investigation (FBI) or another agency for release of racial/ethnic and demographic data. See American Civil Liberties Union of New Jersey v. F.B.I., 733 F.3d 526 (3rd Cir. 2013).

SUGGESTED ANSWERS TO END-OF-CHAPTER ASSIGNMENTS Review Questions 1.

The Freedom of Information Act is a federal statute, incorporated into the APA, that requires that government records be made available to the public. There are nine exemptions. The purpose of the FOIA is to promote governmental accountability and to keep the government open to public examination.

2.

The nine exemptions to the FOIA are: • National defense and foreign policy • Agency personnel matters • Disclosures required by other statutes • Trade secrets and financial information • Agency memoranda • Personnel, medical and files containing private information • Law enforcement records • Financial institution information • Geological information regarding wells • *Critical infrastructures - new post 9/11/01 exemption

3.

The Privacy Act is a federal statute, incorporated into the APA, that prohibits the government from disclosing private records or information in its possession regarding 112

individuals. The purpose of the Privacy Act is to protect the privacy rights and interests of individuals.

4.

The exemptions from the Privacy Act are: • Information needed by agency officials to perform their job • When disclosure is required by the FOIA • Information routinely used • Information provided to the census bureau • Statistics and reporting when individuals are not identified • Information provided to the National Archives • Compelling health and safety information • Information provided to Congress or a Congressional committee • Information provided to the Comptroller General • Information compelled by court order

5.

The Government in the Sunshine Act is a federal statute that requires that agency meeting be open to the public for observation. The purpose of the Government in the Sunshine Act is to ensure openness of government, facilitating democracy and promote an informed citizenry.

Critical Thinking and Applications Problems 1.

a. Yes, the FOIA request to the FBI was properly denied. Pursuant to the FOIA, the government is not obligated to disclose public records that relate to a criminal investigation. Pursuant to the Privacy Act, a personal record is not subject to disclosure unless there is consent or it falls under an exemption, which this request does not. If consent was provided during the job application process, there must be a balancing of interests and it is likely that the government’s interest in pursuing the criminal investigation should prevail.

Since the request appears to be properly denied, there are no remedies available to her although she does have the right to appeal the decision and if again denied, seek judicial review. b. The disclosure was improper. The information disclosed is not subject to any of the Privacy Act exemptions and is an unwarranted invasion of privacy as to Grace’s personal health information. Civil damages are likely if the disclosure is used to one’s detriment, as is the case here with a job applicant. Regarding the Privacy Act violations, a person is entitled to recovery of actual damages as well as attorney fees and costs if the violation can be shown to be willful.

2.

The FOIA and the Privacy Act are essentially polar opposites. The purpose of the FOIA is to make government information and data available to the public while the purpose of the Privacy Act is to prevent information regarding private individuals from disclosure, assuring individual privacy rights and interests.

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The FOIA presumes that information in the possession of the government should be made available to the public unless the information falls into one or more of nine stated exceptions. The memorandum should discuss whether any of the exceptions apply in the present case.

The Privacy Act is designed to prohibit personal information from being disclosed regarding individuals. Exceptions also exist to the Privacy Act. The memorandum should also analyze whether any of the Privacy Act exceptions apply.

When the FOIA and the Privacy Act conflict, the competing interests of the individual and the public must be balanced. The memorandum should discuss whether a compelling public interest supersedes the private interest permitting disclosure. Regarding the Privacy Act violations, a person is entitled to recovery of actual damages as well as attorney fees and costs if the violation can be shown to be willful.

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Chapter 11 Accountability through Liability CHAPTER OVERVIEW Chapter 11 focuses on agency accountability through liability. This chapter examines the law of government liability, including both public (agency) liability and the liability of those who act under the authority of a government. Chapter 11 is concerned with damages and injunctive relief.

Providing compensation to harmed citizens is another equally important objective of government liability. Section 1983, federal and state tort claims acts, Bivens actions, and other statutes provide a means through which injured people may seek compensation from the government.

Even though sovereign immunity has been waived in many instances, other immunities, such as the discretionary function and public duty doctrines, limit the liability of the government even if negligence or bad behavior by government officials can be proven. In addition, the government gives itself advantages by specifying and limiting the procedures and types of damages that may be obtained.

CHAPTER OBJECTIVES After completing this chapter, the student should be able to • Identify and describe the historic source of governmental immunity.

• Describe the architecture (who may sue and be sued, the elements, and basic process) of the Federal Tort Claims Act, including its purpose, the basic rule, and its exceptions. You should be able to do the same for constitutional claims, common law claims, and Tucker Act claims against governments.

• Identify and describe governmental and employee liabilities created by Section 1983, Constitutional Claims, and state tort laws, and apply those laws to given fact scenarios.

• Apply the law of governmental liability and immunities to private actors when they are performing governmental functions.

• Explain the circumstances that can lead to private parties being treated like government officials for purposes of the liabilities covered in this chapter • Apply the liabilities described in this chapter to cases involving free speech and takings • Brief a judicial opinion with little outside assistance. You should be successful in identifying the relevant facts. You should also be successful in identifying the legal issue and analyzing the court’s rationale in at least 75 percent of your briefs.

LECTURE OUTLINE 11.1

INTRODUCTION • Government provides a multitude of public services without a profit incentive • Revenues are derived from the people • Government liability could jeopardize the ability to deliver services • This chapter addresses damages and injunctive relief o The APA does not govern money damages claims 115

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Government liability provides: o Control of discretion o Prevention of abuse o Compensation for injured citizens Government liability is more limited than personal liability

11.2

SOVEREIGN IMMUNITY • Holds the government to be immune from liability • Historically a concept begun in old England and adopted after the revolution • The concept is questioned and criticized but still in effect o The government must consent to be sued ▪ Applies to state and federal governments ▪ In some states sovereign immunity has been abolished or limited by statute and/or judicial decision • Public officials may be sued in their official capacity or an individual capacity o If sued in their individual capacity it is similar to suing them personally o If sued in their official capacity, it is the same as suing the government

11.3

FEDERAL TORT CLAIMS ACT AND ITS EXCEPTIONS • In the Federal Torts Claims Act (FTCA) of 1946, the U.S. waived immunity regarding a number of torts o Three exceptions to liability are named: ▪ Executive functions ▪ Intentional torts ▪ Discretionary functions 11.3(a) Executive Functions • Specific administrative functions • Claims arising in foreign nations o Based on separation of powers theories 11.3(b)Intentional Torts • Claims arising out of: o Assault* o Battery* o False imprisonment* o False arrest* o Malicious prosecution* o Abuse of process* o Amendment in 1974 made law enforcement officers liable for the asterisked items above o Libel o Slander o Misrepresentation o Deceit o Interference with contract o Continue to be immunized even as against law enforcement officers 11.3(c) Discretionary Function Doctrine 116

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Discretionary acts of government employees, officers and officials o Acts involving: ▪ Planning ▪ Policy ▪ Judgment Ministerial acts are not included in immunity Many acts include both discretionary and ministerial characteristics o Line between acts is not well defined so each jurisdiction may vary in interpretation

Bowers v. City of Chattanooga, 826 S.W.2d 427 (Tenn. 1992) Facts: Danny Bowers was a six-year-old first grader who rode the bus to and from school. On September 9, 1986, a car struck him after being dropped off after school.

The bus stop was not specifically designated but was left to the driver to stop along the particular road. Because of overcrowding, the Chattanooga School System Transportation Division made some changes to bus routes, bus assignments and bus stop times. As a result, on the day of the accident, Danny was on a different bus and had been dropped off ten minutes earlier than usual. The bus also stopped at a spot different from the normal drop-off. Danny’s mother or grandmother normally accompanied him to and from the bus stop every day, but they had not been informed of the changes. As a result, neither was at the stop when Danny disembarked the bus. This hearing is solely being conducted to determine if the City was protected by immunity.

Issue: Is the City of Chattanooga protected by immunity from liability for the negligent acts of the bus driver?

Decision: No. The plan and policy of the City to provide safe passage for students makes the decision of the bus driver on where to stop, an operational act, not within the discretionary function exception to government immunity. When a decision results from a determination based on preexisting laws, regulations, policies or standards, the maker is not using discretion but is performing an operational function. The court applied a planning-operational test based on their analysis that planning was a discretionary function while performing an operational function was not. Clearly, the statute granting immunity did so only for discretionary acts only.

11.3(d)Scope of Employment • Government is not liable for acts committed outside of an employee, officer or official outside of their employment 11.3(e) Public Duty Doctrine • Generally, duties are owed to the public but not to individuals • Founded on separation of powers theory o Inadequate officials can be removed by voters • Duties to individuals may apply if a special duty or relationship exists o In Martin v. United States, a murderer/thief/rapist was released from prison to work undercover. He absconded immediately. Officials knew he was infatuated with Martin and had previously harassed and otherwise threatened her. They did not notify her that he had been released. Martin was murdered. Liability was determined based on 117

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the fact that the prisoner had not been adequately supervised after release, Martin had not been warned and the duty of officials to prevent the crime was personal to Martin.

Questions to determine special duty or relationship (one yes creates liability): o Did government officials create the risk that caused plaintiff’s injuries? o Did government officials increase the risk of injury to the plaintiff? o Did government officials aggravate an existing injury of the plaintiffs? o Did government officials have custody or in some way control the plaintiff? o Did government officials have a legal duty to the person by ordinance, custom, policy, contract, statute or other law?

Kirk v. City of Shawnee, 10 P.3d 27 (2000) Facts: Kathryn Morse and Roland Morse were married and subsequently divorced. The police were notified that Roland was prone to violence and possessed a gun, which was confiscated. Kathryn, fearing violence, requested and had issued a protection from abuse order (PFA). The FPA order mandated that Roland not contact Kathryn and he was barred from the home. Shawnee Police Department policy provided for “vigorous enforcement of laws relating to domestic matters.” Dispatchers were required to treat domestic violence calls with the same priority as other life-threatening matters. The order did permit Roland to access the residence on September 18th and 19th to remove his property. Kathryn requested police presence during the visit but was told that while the police could make a brief stop, they could not stay for an extended period of time. She was advised to hire private security or to have friends stay with her during Roland’s visit.

She was also told to stay by the phone and call 911 should a problem ensue. On September 19th, Roland entered the premises with a shotgun, forced a friend to leave and then killed Kathryn and then himself. This case is brought by Kathryn’s heir and the executrix of her estate.

Issue: Did the existence of a FPA, or any other circumstance, create a special duty owed to Kathryn that set aside the public duty doctrine, making the city of Shawnee or the police department liable for her death?

Decision: No. The public duty doctrine maintains that a government agency (here the police department) owes duties to the public at large but not necessarily to individuals, unless a special duty to the individual can be shown. Special duties generally fall into two categories. The first is when a special relationship exists between the agency and wrongdoers. The court cited two examples of this special relationship duty; first, the duty owed to surrounding residents to maintain safe and secure prisons and second, the duty owed to a prisoner, under State custody, to be protected from attack by other prisoners. The second category involves circumstances where a special relationship exists between the agency and the injured party. An example cited was the State’s duty to warn of a child’s propensity toward violence and to protect other children in their custody from that child. Where no special duty exists, there can be no successful tort claims against the governmental entity. Here, the existence of an FPA does not create a special circumstance putting Kathryn under the control of the police department mandating individualized care. Furthermore, since she was repeatedly told that police 118

presence could not be provided for extended periods, there was no evidence of an affirmative act which could lead Kathryn to believe that special care or attention would be afforded to her. The court further concluded that the discretionary function doctrine provided immunity and thus shielded the city from liability.

11.3(f) Damages and Other Limitations • Liability does not include prior interest or punitive damages • There is no dollar limit on judgments against the United States • Many states have passed statutes limiting state liability 11.4 11.5

FEDERAL EMPLOYEE REFORM AND TORT COMPENSATION ACT SECTION 1983 ACTIONS • The Civil Rights Act of 1871 was passed to enforce the Fourteenth Amendment • Today the Act used to enforce any constitutionally protected violation o The Act was codified as 42 U.S.C. § 1983 ▪ Suits under the Act are called § 1983 actions 11.5(a) Plaintiffs and Defendants • The statute provides that citizens and other persons may maintain a law suit o Citizens is interpreted to mean natural persons o Persons is broader and has been interpreted as including businesses • Certain limitations apply regarding who may sue o Suits for violations of Privileges and Immunities are limited to “persons” o State and local governments may not sue under § 1983 ▪ Parens Patriae suits, where a government sues on behalf of a citizen are an exception o § 1983 creates liability for persons that violate another person’s rights may sue ▪ States are not persons so states may not be sued in a § 1983 action • State officers may be sued in an individual capacity • See Figure 11.1 for a chart showing § 1983 liability • See Figure 11.2 for a chart showing an analytical map of government damages liability Monell v. Department of Social Services, 436 U.S. 658 (1978) Facts: A class action suit was brought on behalf of female employees working in the educational system of New York City. The suit attacks the official policy of the Board of Education requiring pregnant employees to take unpaid leave before such leave was medically necessary. The suit asks for injunctive relief and back pay for those compelled to take leave. Named as defendants were the Department of Education and its Commissioner, the Board of Education and its Chancellor and the city of New York and its Mayor. Each of the individuals was sued in their official capacity.

Issue: Are local governmental officials and/or local independent school boards “persons” under § 1983 of the Civil Rights Act of 1871, (42 U.S.C.) when equitable relief in the form of back pay is sought against them in their official capacities?

Decision: Yes. Section 1983 allows that local governing bodies may be sued directly for monetary, declaratory and injunctive relief where an action unconstitutionally 119

implements or executes an official policy. Section 1983 does not however intend liability if the policy was not official nor did liability attach based on respondeat superior because the municipality employed a tortfeasor.

In the present case, the official policy inflicts injury making the governmental entities responsible. Monroe v. Pape, relied on by the New York Court of Appeals, holding that local governments are wholly immune from suits, is therefore overruled.

11.5(b)Deprivation and Color of Law • Plaintiff in a § 1983 case must prove: o Defendant acted under color of law ▪ Deprivation occurs under authority of state o Caused o Plaintiff to be deprived of a constitutionally protected right, including: ▪ Fourteenth Amendment due process/equal protection ▪ Fourth Amendment search and seizure ▪ Fourth Amendment reasonableness regarding excessive force ▪ Sixth Amendment attorney client privilege violations ▪ Eighth Amendment cruel and unusual punishment • Tests and standards that apply vary and include: o Purposeful discrimination o Deliberate indifference County of Sacramento v. Lewis, 118 S.Ct. 1708 (1998) (p. 312) Facts: After the police attempted a legal stop of a motorcycle, a high speed chase ensued when the motorcycle sped away at high speed. The chase resulted in speeds of approximately 100 mph. When the motorcycle tipped over while attempting a turn, the police cruiser struck one of the two motorcycle riders when it could not stop in time. Suit was brought against the police for allegedly violating the Fourteenth Amendment’s guarantee of due process by causing death through deliberate or reckless indifference to life as a result of the chase.

Issue: Does a high speed chase, pursuant to a lawful attempt to arrest constitute deliberate or reckless indifference to life violating Fourteenth Amendment guarantees of due process?

Decision: No. Only a showing of intent to cause harm or injury unrelated to a legitimate and lawful arrest rises to the level of arbitrary conduct violating Fourteenth Amendment guarantees. Whether the chase in this case is deemed reasonable or not is not determinative of liability. For liability to attach, the police conduct must rise to the level of arbitrary conduct that shocks the conscience. Here, the police were doing their duty, reacting to a situation they perceived as requiring pursuit and arrest. The chase, while not necessarily prudent, did not shock the conscience nor did it evidence intent to cause harm unwarranted by the situation.

11.5(c) Remedies, Fees and Costs • Available damages: o Nominal – Minimal amount where a violation occurred but no damages o Actual/compensatory 120

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▪ Special – Medical costs, loss of income, damage to property…

▪ General – Pain and suffering, emotional distress… o Punitive – Punishment Other remedies: o Declaratory judgment – Court pronouncement of the rights, obligations and legal relationship between parties o Injunction – Requirement that an action either be taken or not taken (may be temporary, preliminary or permanent) Attorney fees and costs may be awarded to winning party

Smith v. Wade, 461 U.S. 30 (1983) Facts: Smith was a guard at Algoa Reformatory and Wade was an inmate. Wade voluntarily checked into Algoa’s protective custody unit. After a stint in punitive segregation, Wade was moved into administrative segregation and placed in a cell with another inmate. When Smith came on duty, a third inmate was added to the cell. Wade was harassed, beaten and sexually assaulted by his cellmates. Evidence showed that the third cellmate added by Smith had a history of fighting. Other evidence showed that an inmate in that same dormitory had been beaten to death a few weeks earlier while Smith was on duty. Further evidence showed that there was another cell in the same dormitory with room for the third inmate but Smith had made no effort to determine availability.

Wade asserted that Smith, and other guards named in the suit, knew or should have known that he was in danger of assault but failed to protect him. The other guards were found not liable, however, Smith was found guilty and both compensatory and punitive damages were awarded against him. This hearing is solely to assess the applicability of punitive damages.

Issue: Can punitive damages be awarded under 42 U.S.C. § 1983?

Decision: Yes. The jury may assess punitive damages when the defendant’s conduct evidences a reckless or callous disregard for the federally protected rights of another.

The court further determined that the threshold supporting punitive damages is reached when the standard of liability supporting the compensatory damages is one of recklessness.

11.5(d)Procedure • Federal courts have jurisdiction in § 1983 cases o 28 U.S.C. § 1331 grants jurisdiction for cases arising under the Constitution and laws of the United States o 28 U.S.C. § 1343(a)(3) grants jurisdiction for cases commenced to redress deprivations of rights secured by the Constitution or statutes providing for equal rights • § 1983 cases may also be filed in state courts with the responsibility to adjudicate federal claims o Defendants may have actions filed in state courts removed to federal court ▪ If the removal was improper, the case can be remanded back to state court • Pendent jurisdiction may apply allowing a federal court to hear a state action when the underlying issue is a federal claim 121

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The doctrine of exhaustion of remedies does not apply to § 1983 cases § 1983 does not contain a specified statute of limitations o Personal injury statutes of limitations are generally applied limiting the filing to two or three years • § 1983 litigation is often resolved in pretrial motions o Summary judgments and dismissals are common • Both sides have a right to a jury determination of damages • A jury is not available for injunctive relief • Jury are available in declaratory relief cases for issues of law but not for equitable issues • Normal appellate rules apply in § 1983 cases 11.5(e) Immunities • To be immune means to be free of liability • § 1983 did not abolish immunities existing prior to its enactment • See Figure 11.3 for a summary of absolute and qualified immunities o Absolute and Qualified ▪ Absolute immunity provides immunity from suit • Motion to dismiss must still be filed and adjudicated o Facts need not be presented ▪ Qualified immunity provides immunity from liability • Case must go to summary judgment or even trial to determine application o Facts required to support finding immunity • To overcome a qualified immunity claim, a clearly established right must be shown to have been violated Harlow v. Fitzgerald, 457 U.S. 800 (1982) Facts: Fitzgerald has instituted a suit against Harlow and Butterfield (petitioners) for a violation of his constitutional and statutory rights. The suit alleges that the petitioners, in their capacity as senior White House aides to former president Richard M. Nixon conspired to violate his rights.

Issue: Are allegations of malice sufficient to subject government officials to the costs of trial or the burdens of discovery?

Decision: No. Governmental officials performing discretionary functions are generally shielded from liability unless their conduct violates clearly established statutory or constitutional rights that a reasonable person would be aware of. If the law was not clearly established at the time that the governmental official acted, no liability may accrue. One cannot be expected to know their conduct was wrong or even questionable where the law previously did not exist.

(Note – This excerpt only addresses the issue of liability without providing the underlying facts and allegations.) o Functional Approach ▪ Immunity is not based on position but is based on function performed o Judges 122

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Afforded absolute immunity for judicial acts • Outrageous conduct may negate immunity ▪ Judges state of mind is irrelevant • Malice does not affect immunity ▪ There is no absolute immunity for administrative acts • Qualified immunity will apply ▪ Judicial immunity applies to all who perform judicial functions including: • Trial and appellate judges • Justices of the peace • Municipal referees • Prison or parole officials conducting hearings ▪ Judicial immunity does not negate injunctive relief for violations of § 1983 Prosecutors ▪ Absolute immunity applies when “intimately associated with the judicial phase of the trial” • a/k/a quasi-judicial immunity ▪ Qualified immunity applies when giving advice to law enforcement officials or assisting in a law enforcement function ▪ Prosecutors are not immune from injunctive relief sought for violations of § 1983 Law Enforcement Officers ▪ Absolute immunity applies when performing quasi-judicial acts such as: • Executing search warrants • Serving process • Executing an arrest warrant • Includes when testifying in court o Even if perjury is committed ▪ Not immune from criminal sanctions for perjury ▪ Qualified immunity applies when in an investigative or law enforcement capacity Witness and Jurors ▪ Absolute immunity even for perjury • Not immune from criminal sanctions for perjury ▪ Petit and grand jury members enjoy absolute immunity Public Defenders ▪ No immunity absolute or qualified Legislators ▪ Absolute immunity while performing legislative functions ▪ Enjoy immunity from injunctive relief also ▪ Agency officials who create regulations enjoy legislative immunity • Reminder – Function not position creates immunity 123

o Procedure and Immunity Claims ▪ Claims of immunity are commonly raised through pretrial motion • Motion to dismiss o Strictly construed standards ▪ Allegations in complaint are presumed true • No new facts introduced ▪ Reasonable inferences are made in favor of nonmoving party o Immediate appeal is available if denied (protects official from possible costs and time defending lawsuit) • Motion for summary judgment o Some facts may be reviewed o Granted when no genuine issue of material facts is presented o Genuine evidence of conflict defeats the motion and leads to trial o Immediate appeal is available if denied (protects official fro possible costs and time defending lawsuit) 11.6

CONSTITUTIONAL CLAIMS • Cases claiming constitutional violations, brought directly under the constitution rather than statute, are called “Bivens actions” Bivens v. Six Unknown Agents, 403 U.S. 388 (1971) Facts: Federal agents for the Bureau of Narcotics, acting under the color of federal authority entered plaintiff’s apartment and arrested him for alleged narcotics violations.

He was handcuffed in front of his wife and child and his family was threatened with arrest. His entire apartment was then thoroughly searched. He was taken into custody, interrogated, booked and searched. Bivens brought suit alleging that the search was without a duly executed warrant, the arrest was accompanied by unreasonable force, and the search and arrest were without probable cause. Bivens asserts that his Fourth Amendment rights were violated and that damages were appropriate. Respondents agree that a remedy may exist but assert that the remedy should be for a breach of privacy rights, affording only remedies based on state tort law, in state courts.

Issue: Does the Fourth Amendment apply when there is also state jurisdiction that would penalize a similar act if engaged in by a private citizen?

Decision: Yes. The respondent’s theory is an undue restrictive interpretation of Fourth Amendment applications. The Fourth Amendment will certainly apply to regulate federal acts and action whether there is a state remedy or not. The Fourth Amendment guarantees to citizens the absolute right to be free of unreasonable search and seizure carried out under federal authority. The petitioner is entitled to recover damages for the agents’ violation of his constitutional rights.

11.7

COMMON LAW TORTS AND OFFICIAL IMMUNITY 124

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Common law torts include (but are not limited to): o Intentional infliction of emotional distress o Defamation o Invasion of privacy Federal governmental officials enjoy “official immunity” o Official immunity is absolute immunity from common law torts ▪ Applies to any discretionary acts taken in an official capacity • Decision making • Policy making ▪ Does not apply to ministerial acts

Strothman v. Gefreh, 739 F.2d 515 (10th Cir. 1984) Facts: Plaintiff is an Administrative Law Judge in Charge (ALJIC) who was removed from his position. He filed a law suit against seven ALJs who he claimed committed defamation, conspiracy and extreme and outrageous conduct while attempting to cause his termination. The seven defendants did not deny writing letters criticizing the plaintiff’s managerial abilities. The lower court denied the defendant’s motion for summary judgment stating that judicial immunity protection did not apply. On appeal, the defendants do not contest the failure of judicial immunity but assert that official immunity should be applied, shielding them from liability.

Issue: Does the writing of a letter criticizing the ALJIC fall under a discretionary official function allowing the application of official immunity?

Decision: Yes. The acts of the seven defendants were clearly not made in an adjudicatory capacity so the lower court was correct in not applying judicial immunity.

The letters were written to the plaintiff and to the Regional Chief ALJ relating to management issues under the plaintiff’s charge. Each letter was a response to a memo or meeting and none were initiated by a defendant ALJ. Each letter related to managerial duties or performance reviews in the office. The court determined that the letters were unquestionably work related and done within the scope of their employment.

Furthermore, the court concluded that the letters involved policy decisions and judgment that were not made pursuant to a fixed standard or operational directive but were based on matters involving discretion. A grant of official immunity, affording absolute immunity, is appropriate in this case to preserve the policies of protecting officials performing discretionary functions.

11.8

TUCKER ACT • Provides the United States Claims Court jurisdiction over any claim for damages against the United States based on the Constitution, statutes or regulations of the United States o Provides jurisdiction in: ▪ Government takings cases • i.e. – takings for public use ▪ Contract claims against the government ▪ Certain patent and copyright cases ▪ Claims of unjust conviction and imprisonment o There is no tort jurisdiction 125

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The “Little Tucker Act” gives the district court concurrent jurisdiction in matters below $10,000 Hui v. Castaneda (S.Ct. 2010) Facts: Castaneda was detained by Immigration and Customs Enforcement beginning in March 2006. At the time of his arrival he had a lesion on his penis, which he reported to officials bled, was painful, was growing, and emitted a discharge. He repeatedly reported that it was growing to officials and in December 2006, he informed detention officials that a lump had formed in his groin. Three civilian medical personnel requested biopsies on several occasions. The requests were not granted, instead Castaneda was treated with antibiotics and ibuprofen and he was given extra boxer shorts. A biopsy was performed in January 2007 after the fourth medical officer suggested it. He was diagnosed with penile cancer, had his penis amputated the next day, received chemotherapy, and died from the disease in February 2008. Before he died, and subsequently his estate, sued the U.S. and the officers in charge of his detention under Section 1983 and Bivens.

Issue: Does Congress have the authority to shield federal agents with immunity from Bivens actions when the U.S. can be held liable?

Decision: The right to a constitutionally based remedy lies against the United States.

Congress has the authority to provide official immunity for officers from Bivens actions.

Congress was clear in its grant of immunity to officials in this case.

• United States v. Navajo Nation, 556 U.S. ___ (2009) Facts: Federal statute authorizes the Secretary of Interior to issue mining permits for reservation lands with a royalty payment to be made to the applicable tribe. The statute authorizes the Secretary to change the royalty rates. The Navajo Nation requested a rate change that was denied. The Navajo Nation sued the U.S. for $600 million. The tribe sought to bypass sovereign immunity by asserting the so-called Indian Tucker Act. Issue: Was the United States liable to the Navajo Nation for a breach of fiduciary duty or other legal obligation under the Indian Tucker Act? Decision: No. Neither the Tucker Act nor the Indian Tucker Act create obligations under which the U.S. can be sued. Instead, they provide the procedural mechanism to enforce other rights. The Navajo Nation’s theories to establish the legal obligation are invalid, and as such, the Indian Tucker Act does not provide a remedy for the claim.

11.9

ETHICAL EXPECTATIONS AND LIABILITY

11.10 PRIVATE PARTIES AS GOVERNMENT ACTORS • Involves situations where government services are administered by private businesses or organizations • Questions related to liability, control and rights enjoyed are unsettled and ongoing (The books discussion is limited to liability.)

• Generally privatization occurs in two forms: o Abandoning of a service by the government ▪ Continuation of service and cost is left to the private market ▪ Core government functions may not be completely abandoned 126

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o Delegation of a program or project to a private entity ▪ Traditionally - Hiring contractors for one time or infrequently occurring needs ▪ Today – More than the occasional need is being delegated • Examples: o Certain social programs o Prisons o Education o Transportation o Waste removal o Emergency medical and fire services o Tax collection o Recreation Liability regarding § 1983 o Generally a contract working on a project is not acting under color of the law o Courts have found the agency and private actor to be so connected that the private actor can be characterized as a state actor ▪ Three tests are applied: • The public function test • The compulsion test • The symbiosis test ▪ See Figure 11-4 for a comparison of these tests o A private party found liable under § 1983 is not entitled to immunities that protect governmental employees under § 1983 o Private parties may be sued under traditional tort and contract theories even if § 1983 doesn’t apply o Establishing § 1983 liability permits injunctive relief and damages

11.11 OTHER CONSTITUTIONAL ISSUES • Eminent Domain o The authority to take private party for public use. Governments must provide just compensation for • Free Speech o Protected by the First Amendment o Agencies confront free speech rights in many contexts ▪ regulate advertising and communications ▪ compel information reporting ▪ managing their own work environment o Garcetti v. Ceballos: Court held that speech that is part of the employee’s duties isn’t protected by the First Amendment 11.12 CONCLUSION LIST OF CHANGES/TRANSITION GUIDE

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The objectives have been revised for the seventh edition. The following objectives are new for the seventh edition and have been revised from objectives found in the sixth edition: •

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Describe the architecture (who may sue and be sued, the elements, and basic process) of the Federal Tort Claims Act, including its purpose, the basic rule, and its exceptions. You should be able to do the same for constitutional claims, common law claims, and Tucker Act claims against governments.

Identify and describe governmental and employee liabilities created by Section 1983, Constitutional Claims, and state tort laws, and apply those laws to given fact scenarios.

The sidebar “President Trump in Court” on page 389 is new for the seventh edition. Section 11.11 discussing eminent domain and the First Amendment has also been added.

ADDITIONAL ASSIGNMENTS AND CLASS ACTIVITIES For a possible assignment, have students write case briefs for LeGrande v. United States, 687 F.3d 800, 808 (7th Cir. 2012) and Kohl v. United States, 699 F.3d 935 (6th Cir. 2012) dealing with the discretionary function doctrine. In the case briefs, students should identify the relevant facts, identify the key legal issues involving the discretionary function doctrine, and analyze the court’s rationale.

SUGGESTED ANSWERS TO END-OF-CHAPTER ASSIGNMENTS Review Questions 1.

Sovereign immunity is a doctrine that holds government immune or free from liability.

Unless waived by statute, the doctrine remains in effect regarding federal and state governments.

2.

Suing a governmental official in his or her official capacity is the same as suing the government. Suing a governmental official in his or her individual capacity is the same as suing the officer personally.

3.

To prove a § 1983 case, the plaintiff must prove: • The defendant, while acting under “color of the law”; • caused; • the plaintiff to be deprived of a right protected by the Constitution or laws of the United States

4.

The United States and each of the individual states are immune from lawsuit under § 1983. Local governments may be sued if it can be shown that there was a policy statement, ordinance, regulation, custom or decision of the locality that caused the plaintiff’s injuries. Federal, state and local officials may be sued individually under § 1983 if their actions deprive an individual of protected rights while acting under color of law.

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5.

Absolute immunity provides protection from suit for performing certain functions.

Qualified immunity provides freedom from liability for performing certain functions.

6.

Judges are protected by absolute immunity for judicial acts such as conducting hearings and trials, issuing orders and warrants and statements made during proceedings. They are afforded qualified immunity for administrative acts and personnel actions performed.

Prosecutors are granted absolute immunity while appearing in court and while complying with court orders. They enjoy qualified immunity while conducting investigations, counseling law enforcement officers, performing administrative acts and performing personnel actions.

7.

A Bivens action is a lawsuit brought directly under the Constitution for civil rights violations.

8.

Official immunity is absolute immunity from common law actions, which protects federal government officials when performing an official duty that is discretionary in nature.

Critical Thinking and Application Problems 1.

Dwayne, as a law enforcement officer is only entitled to qualified immunity based on these facts. Law enforcement officers are entitled to qualified immunity for investigations and warrantless searches which is the issue here. Dwayne’s state of mind is irrelevant and his bad faith and improper motives are not dispositive. Dwayne knowingly violated a clearly established Fourth Amendment right. Immunity should be denied.

2.

There is no doubt that general damages may be awarded in this case. If the suit against Dwayne is in his individual capacity, punitive damages may also be awarded. If the suit is against Dwayne in an official capacity, punitive damages are only available if the court determines Dwayne’s actions to be malicious. Injunctive relief is also available, regardless of the individual or official nature of the suit. (Note – Injunctive damages are available whether or not immunity is available.)

3.

The state is not a person as required under § 1983 so they are not subject to liability. The county, as a local government has been recognized as a person and therefore may be sued, however, Chuck will not likely prevail because he will not be able to show that there was a policy statement, ordinance, regulation, custom or decision of the locality that caused his injuries.

4.

To sue the county, Chuck must show that there was a policy statement, ordinance, regulation, custom or decision of the locality that caused his injuries. If he can do this, he must then show that Dwayne was acting under “color of the law” that caused his deprivation of Fourth Amendment rights. The state is immune from a § 1983 suit because the state is not a person and therefore not subject to § 1983 liability.

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